Corporate Responsibility 2016 - Siemens Gamesa

CorporateResponsibility

Report

2016

Gamesa Corporate Responsibility Report 2016 Page 2 of 169

TABLE OF CONTENTS

BASIC FIGURES......................................................................................................................................... 3

PART I: General Standard Disclosures 4

I.01.- STRATEGY AND ANALYSIS................................................................................................................ 5

I.02.- ORGANIZATIONAL PROFILE............................................................................................................ 21

I.03.- MATERIAL ASPECTS AND BOUNDARIES.......................................................................................... 45

I.04.- STAKEHOLDER ENGAGEMENT........................................................................................................ 51

I.05.- REPORT PROFILE ........................................................................................................................... 57

I.06.- GOVERNANCE ............................................................................................................................... 58

I.07.- ETHICS AND INTEGRITY ................................................................................................................. 75

PART II: Specific Standard Disclosures 81

II.08.- MANAGEMENT APPROACH .......................................................................................................... 82

II.09.- ECONOMIC DIMENSION ............................................................................................................... 84

II.10.- ENVIRONMENTAL DIMENSION ..................................................................................................... 93

II.11.- SOCIAL DIMENSION.................................................................................................................... 117

II.11a.- LABOR PRACTICES AND DECENT WORK ............................................................................ 117

II.11b.- HUMAN RIGHTS .............................................................................................................. 137

II.11c.- SOCIETY........................................................................................................................... 144

II.11d.- PRODUCT RESPONSIBILITY............................................................................................... 152

APPENDICES 157

APPENDIX I: GRI G4 CONTENT INDEX.................................................................................................... 158

APPENDIX II: EXTERNAL ASSURANCE REPORT ....................................................................................... 164

APPENDIX III: LIST OF CENTERS............................................................................................................. 165

APPENDIX IV: LIST OF TABLES AND GRAPHS.......................................................................................... 166

Corporate Responsibility Report 2016Section 00 – Introduction


BASIC FIGURES

2016 2015 2014 2013 2012 2011 2010

Sales (€ million) 4,612 3,504 2,846 2,336 2,665 3,033 2,764Equivalent MW sold 4,332 3,180 2,623 1,953 2,119 2,802 2,405EBIT (€ million) 477 294 191 123 (631) 131 119Net earnings after tax (€ million) (Loss) 301 175 101 45 (659) 51 50NFD / EBITDA -0.9x -0.6x -0.4x 1.5x 2.5x 2x -0.6xListing at 12/31 (€) 19.27 15.82 7.56 7.58 1.66 3.21 5.71Earnings per share (€) (Loss) 1.0887 0.6164 0.3550 0.1796 (2.63) 0.209 0.208Gross dividend per share (€/share) 1

- 0.152 0.083 0 0 0.051 0.119

2016 2015 2014 2013 2012 2011 2010

Workforce 9,367 7,271 6,431 6,079 6,646 8,357 7,262Sick leave frequency rate 0.85 1.08 1.72 1.74 2.39 3.84 4.19Severity rate 0.02 0.02 0.05 0.05 0.07 0.09 0.13% international workforce 56 47 41 36 36 42 36% women in workforce 18.01 21.26 22.68 23.65 23.74 23.17 24.55% permanent employment contracts 92 92 93 92 92 88 87Hours of training / employee 40.70 25.90 19.31 7.49 23.59 39.57 32.27

2016 2015 2014 2013 2012 2011 2010

United Nations Global Compact

Dow Global Sustainability Index - - - FTSE4Good

Ethibel Excellence Europe

Global Challenges Index

CleanTech Index (CTIUS)

2016 2015 2014 2013 2012 2011 2010

Consumption of raw materials (t) 257,206 149,554 112,044 103,507 119,687 137,254 113,364Energy consumption (TJ) 521 452 308 506 574 627 1,217Water consumption (m

3) 159,598 126,358 97,341 80,048 95,261 101,105 93,140

Waste generated (t) 19,394 11,552 10,841 10,346 11,191 16,336 15,952Effluents generated (m

3) 127,678 101,087 77,872 62,356 59,332 61,488 56,113

CO2 emissions (t CO2) 30,156 36,855 29,879 39,436 47,656 56,747 57,982CO2 prevented (million t CO2) 58.31 51.91 46.85 43.25 40.15 36.21 31.25Energy consumption rate (GJ) 113 129 108 217 202 207 -Water consumption rate (m

3) 35 36 34 34 33 33 34

Waste generation rate (t) 4.2 3.2 3.8 4.4 3.9 5.3 5Effluent generation rate (m

3) 28 28 27 27 20 20 20

CO2 emission rate (t) 7 10 11 17 16 18 21CO2 prevented rate (t) 1,384 1,447 1,264 1,329 1,384 1,636 1,403

Note: The rate obtained is in relation to the year’s billing expressed in million euros (€ million).

1As indicated in Note 37 of the Report on the Consolidated Annual Accounts 2016, Gamesa has signed a merger agreement with Siemens.The General Shareholders' Meeting held on October 25, 2016 approved the merger. It likewise agreed to change the Board of Directors'composition and an increase of capital to cover the swap with 401,874,595 newly issued shares, subject to the merger's effectivecompletion. Should the merger's effective completion take place prior to the 2017 Annual General Shareholders' Meeting, the currentBoard of Directors will be empowered to propose to the General Shareholder's Meeting the relevant resolution on the dividenddistribution on all of the shares after the aforementioned increase of capital.

CORPORATE RESPONSIBILITY REPORT 2016 | PART I. GENERAL DISCLOSURES


PART I: General Standard Disclosures

CORPORATE RESPONSIBILITY REPORT 2016 | PART I. GENERAL DISCLOSURESSection I.01. – STRATEGY AND ANALYSIS


I.01.- STRATEGY AND ANALYSIS

G4-1 Statement from the most senior decision-maker of the organization

The year 2016 can, without doubt, be considered an extraordinary year in which the targets set were exceeded

and the groundwork laid for Grupo Gamesa’s long-term strategy.

The company ended the year with 32% growth in sales to reach €4.612 billion. EBIT amounted to €477 million,

equivalent to an annual growth rate of 48% and an EBIT margin of 10.4%, 1.1 percentage points above the EBIT

margin for the same period in 2015.

This growth in turnover during 2016 was the outcome of the company’s strong competitive positioning and its

presence in markets undergoing above-average growth. The strength of the company’s competitive positioning

is not only based on its diversified geographic presence, but also on an extensive customer base, a products and

services portfolio geared at maximizing the return from wind energy assets and its presence across the entire

wind energy value chain.

These advances allowed Gamesa to end 2016 with a net profit figure that grew by 77% on a year-on-year basis

to reach €301 million and to progress towards its main goals, thus demonstrating our strength and exceeding

the undertaking made to create value for our shareholders.

Aside from these achievements in economic and financial management, however, the company also maintains a

commitment to the business’s sustainability, in the broadest meaning of the word, by actively seeking to

generate value for stakeholders. This is recognized by the world’s main sustainability indices, such as the

FTSE4Good, the Ethibel Sustainability Indices or the prestigious Dow Jones Sustainability Indices, of which

Gamesa forms part.

Gamesa is a significant driving force for progress in the communities in which it operates. In 2016, the company

reinvested almost all the earnings it generated in its stakeholders by boosting industrial activity through the

investments it made and purchases from suppliers, as well as by contributing economic resources to public

administrations and fostering a stable local economy.

The company remains firmly people-driven, convinced that they are the key to Gamesa’s success. We ended the

year with a workforce exceeding 9,300 professionals and recruited 2,700 new employees, creating quality jobs

and focusing our efforts on training – more than 330,000 hours were dedicated to training in 2016 –, in addition

to managing and retaining talent and protecting diversity and gender equality. This approach is based on our firm

commitment to occupational health and safety, which once more improved in 2016 on the previous year with a

21% fall in the frequency rate of accidents involving sick leave. Our attention is firmly focused encouraging an

innovative culture in the area of prevention.

Developing a competitive supply chain, which is also ethical, responsible and sustainable, remains as one of our

key goals. We work on supplier control systems to assess our suppliers’ contribution to the company’s strategic

objectives. Today Gamesa has more than 9,900 suppliers across the world with an annual procurement volume

exceeding €3.7 billion, which are mainly based in Spain, India, China, the United States and Brazil. The company

also drives forward their global development, given that they have the possibility of not only supplying within

their regions but also to other regions through Gamesa.

Along with this, Gamesa is actively involved in the communities in which it has a presence by going beyond

business channels through social initiative programs which can count on our employees’ active participation. In

2016, these programs were centered on countries like Mexico and Brazil by means of initiatives having an

incidence on priority areas, such as healthcare, education, care for the environment and infrastructure

development. This year we especially wish to highlight a program that allowed us to bring children from different

parts of India to Spain, so they could take part in the Donosti Cup 2016. This program was aimed at encouraging

inclusion through sport in the belief that we are all capable of providing new life opportunities thanks to it.



In the environmental area, Gamesa has taken up the challenge of becoming a carbon-neutral company by 2025,

thereby turning it into an industrial point of reference and favoring a more sustainable future in terms of energy.

Furthermore, the installation of 4,262 MW of wind turbines increased the group’s cumulative wind energy power

to 38.8 GW and allowed its customers across the world to avoid emitting more than 58 million tons of CO2 a

year, thus contributing to a reduction in greenhouse gases and mitigating their effects.

We maintain an integrity model which relies on values, ethical principles and guidelines and the group’s

regulatory compliance. Proof of this is the updating of company’s Code of Conduct, the Whistleblowing

Channel’s development and the monitoring conducted on the crime prevention and anti-fraud model’s review.

Training sessions involving more than 2,400 professionals were carried out during their development.

Management transparency and integrity are non-negotiable at our company and were strengthened as the main

pillars which uphold our identity, precisely in the year we celebrated Grupo Gamesa’s 40th anniversary (1976-

2016).

We reaffirm our commitment to the United Nations Global Compact’s principles, which we endorsed in 2005, by

constantly working on issues connected with human rights and maintaining responsible labor, environmental

and anti-corruption practices, which all enjoy universal consensus.

I hope this report we are placing at the disposal of our stakeholders, which follows the Global Reporting

Initiative’s guidelines, provides a balanced, detailed view of these and other challenges, goals and achievements.

Lastly, I would like to express my utmost gratitude to all the people who have made it possible to reach all the

goals we have set for ourselves to carry on building a more solid company and maintain a brand recognition that

marks us out us as a leading technology company in the development of solutions aimed at attaining sustainable

development.

Ignacio MartínExecutive Chairman



G4-2 Key impacts, risks and opportunities

Gamesa’s commitment to sustainability is structured around its economic, environmental and socialperformance.

Economic dimension

Gamesa’s activity within the wind energy sector aims to make a contribution to energy security in terms ofboth the independence of energy supplies (local) as well as in terms of the resource’s abundance(renewable) through an energy source which allows for the diversification of energy supplies and mitigatesany possible adverse geopolitical situations through a local source of supply.

Gamesa has a clear economic impact on the areas where it operates as a company which drives forwardindustrial activity through the investments it makes and the corresponding creation of quality jobs. It alsogenerates a lot of service activities in said areas and provides economic resources to the publicadministration.

The company is a leading player in the wind energy industry, an industry which is a key solution for climatechange, air pollution, energy security and price stability, in addition to acting as a catalyst for new industriesand jobs.

According to the Global Wind Energy Council’s (GWEC) statistics2, the world’s total wind energy capacityreached 486,749 MW at the end of 2016 after a total of 54 new gigawatts were installed during the year.

China installed a total of 23 gigawatts of wind energy, almost half of the total of 54 gigawatts installedthroughout the world in 2016, and is becoming the main driving force for change, followed closely by theUnited States, Germany and India. Significant actions also took place in countries like France, Turkey and theNetherlands in 2016.

Table 1.- Global wind energy market

(in MW) New capacityinstalled in 2016

Cumulative2016

Cumulative2015

Cumulative2014

Cumulative2013

Cumulative2012

China 23,328 168,690 145,362 114,604 91,412 75,324United States 8,203 82,184 73,991 65,877 61,110 60,007Germany 5,443 50,018 44,941 39,128 34,250 31,270India 3,612 28,700 25,088 22,465 20,150 18,421Spain 49 23,074 23,025 23,025 22,959 22,784United Kingdom 736 14,543 13,809 12,633 10,711 8,649Canada 702 11,900 11,219 9,694 7,823 6,204France 1,561 12,066 10,505 9,285 8,243 7,623Italy 282 9,257 8,975 8,663 8,558 8,118Brazil 2,014 10,740 8,726 5,962 3,466 2,508Rest of the world 8,670 75,577 67,039 58,359 49,914 42,140

Worldwide total 54,600 486,749 432,680 369,695 318,596 283,048

2Source: Global Wind Energy Council (GWEC)



Fig 1.- Evolution of the global wind energy market

In order to ensure the sustainability of this challenge over time, the group’s economic management is basedon the new Business Plan 2015-20173, which was presented to the markets on June 16, 2015.

Environmental dimension

Gamesa promotes the transition to a low-carbon economy through its experience and actions, and acceptsthe challenge to maintain competitiveness by producing in the most efficient way possible.

This was especially relevant in 2016, as the 22nd United Nations Conference of Parties on Climate Change(COP 22) took place, which gave continuity to COP 21 held in 2015. All countries pooled their efforts in thehistoric Paris Agreement, an ambitious and dynamic universal agreement through which governmentsundertook to initiate a new low-carbon development model.

The aim of the Paris Agreement4 is to keep a global temperature rise this century well below 2º C above pre-industrial levels (and to pursue efforts to limit the temperature increase even further to 1.5º C), ensuringglobal emissions peak as soon as possible, and to achieve climate neutrality in the second half of the century.The force of the agreement is such that 186 countries have submitted their plans to combat climate change(97% of global emissions) in an unprecedented global effort.

Wind turbine design, manufacturing, installation and operations and maintenance as well as wind farmdevelopment, construction and sales are, nonetheless, industrial activities with a potential impact on theenvironment caused to meet consumer demand. Throughout the entire life cycle of 1 kwh of wind energy,impacts are produced on biodiversity, the climate, the ozone layer and acid rain on a global scale and, on alocal scale, on raw material consumption, emissions, waste, effluents and visual environmental impacts.However, each kWh of energy generated with wind energy has 21 times less environmental impact than akWh of energy produced by the oil, 10 times less than the impact of nuclear energy and 5 times less thanthat of gas5. A detailed description of these kinds of impacts can be found in this report’s environmentalsection, as can the actions to control and reduce them.

In an effort to reduce the environmental impact of operations, a variety of actions are carried out likeemission reductions, biodiversity programs, energy efficiency activities which involve the sustainable use ofnatural resources, pollution prevention and the proper management of the waste activities generate.Furthermore, the group makes an effort to use water rationally and sustainably and manage the risks

3Business Plan 2015-2017: Value Creation Through Profitable Growth. (http://www.gamesacorp.com/recursos/doc/accionistas-

inversores/presentaciones/2015/perspectivas-2015-2017.pdf )4

Paris Agreement: http://unfccc.int/resource/docs/2015/cop21/spa/l09s.pdf5

Source: Asociación Empresarial Eólica (AEE - Wind Energy Business Association)

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connected with its scarcity.

It is also important to point out that Gamesa, by performing its activity, makes a direct contribution in thefight against climate change, since the more than 38 GW it has installed prevent air emissions totaling morethan 58 million tons of CO2 a year. Gamesa’s activity therefore contributes to a reduction in greenhouse gas(GHG) emissions and to maintaining a more sustainable environment.

Table 2.- Greenhouse Gas (GHG) emission savings due to installed MW

2016 2015 2014 2013 2012

MW installed - annual 4,262 3,354 2,421 2,071 2,265MW installed - cumulative 38,875 34,618 31,237 28,838 26,768

GWh / year6 97,187 86,545 78,092 72,095 66,920

t NOx prevented 668,164 594,996 536,886 495,653 460,072t SO2 prevented 369,313 328,871 296,752 273,961 254,294TEP prevented 8,348,406 7,434,215 6,708,146 6,192,961 5,755,079

tCO2 prevented7 58,312,500 51,927,000 46,855,500 43,257,000 40,151,715

Social dimension

Due to the process of internationalization it is undergoing, Gamesa has changed radically over the last fewyears. This process has involved the appearance of new significant internal and external challenges for themanagement of the company’s social environment.

A strong commitment in the area of social responsibility has been kept during this transformation. Thus, thecompany fosters ethical and responsible behavior across the value chain in all the countries where itoperates.

The company’s activities have consequences for its stakeholders, and the kinds of relationships Gamesa hasestablished with its customers, employees, suppliers and the communities where it operates are set out inthis report’s different chapters. It takes measures to promote their economic and social development byfavoring employment policies and other policies connected with the supply chain.

6Considering number of effective hours = 2,500 h

7Taking into consideration the following conversion factors per year of wind turbine operation. Source: IEA – 2009: CO2 emissions from fuel

combustion: 0.6 tCO2/MWh; 0.006875 tNOx/MWh; 0.0038 t SO2/MWh; 0.086 TEP/MWh



Corporate Social Responsibility Strategy. CSR Master Plan.

Gamesa construes Corporate Social Responsibility (CSR) as companies’ responsibility for their impact onsociety, as the defined by the European Commission in “A Renewed EU Strategy 2011-2014 for CorporateSocial Responsibility” issued on 25 October 2011. This entails including environmental and socialconsiderations in the organization’s decision-making process.

The group’s vision on CSR matters for 2025 is recognized and admired for being an in-house business modelwhich is differentiated, distinctive and committed to the creation of value and sustainable development.

Said vision is materialized in Gamesa’s Corporate Social Responsibility Strategy, which works on thecompany’s long-term positioning by tackling CSR topics which are relevant for stakeholders by including theirexpectations in the company’s decision-making and day-to-day business management. Gamesa’s CSRstrategy is focused on:

Fulfilling Grupo Gamesa’s Overall CSR Policy and the policies associated to its development. Converting Gamesa into a fundamental partner for customers and investors and into a management

model of reference for the rest of its stakeholders.

Nonetheless, due to the very nature of the concept of Corporate Social Responsibility, it is necessary to workand combine distant time scales with short and medium-term actions to be in a position to introduceupdates in keeping with the business’s needs, regulations, clients, investors and other stakeholders’expectations, and even scientific and technological advances that are under development. Hence, theroadmap laid down for 2025 takes shape in CSR mater plans with shorter timescales, which allow the actionsthat have to be carried out within specific deadlines in the different lines of action to be set.

The CSR Master Plan 2015-2017 covering a three-year period and structured around specific programs iscurrently being developed. Different lines of action are specified for each program and one or several specificactions are set out within these, as the table below summarizes:

Table 3.- CSR Master Plan 2015-2017

PROGRAM 01- INTEGRITY

ITEM AIM TARGET WHEN STATUS

01.- Review and updating of the CorporateSocial Responsibility Policy

Policy document approved by the Board 2015 COMPLETED

02.- Adoption of a responsible public tax

policy

Policy document approved by the Board 2015 COMPLETED

03.- Periodic disclosure of the ProgressReport on fulfillment of the UnitedNations Global Compact’s principles

Preparation of the annual COP 2015

2016

2017

COMPLETED

COMPLETED

IN PROGRESS

04.- Development and monitoring of theWhistleblowing Channel (ComplianceChannel)

Review, dissemination and training 2016 COMPLETED

05.- Review, updating of and training on thecompany’s Code of Conduct

Review, dissemination and training 2016 COMPLETED

06.- Review of the crime prevention andanti-fraud model

Drawing up manuals 2016 COMPLETED

07.- Implementation of the crime preventionand anti-fraud model in all thegeographic areas where Gamesa orgroup companies perform their

activities

Training on the model 2016 COMPLETED

08.- Development of an internal oversightmodel for the crime prevention andanti-fraud model

Annual assessment of the Policy’s fulfillment andeffectiveness to prevent crimes and combat fraud,and of the manual or manuals

2016 COMPLETED



PROGRAM 02- TRANSPARENCY


09.- Implementation of CSR managementtools

CSR dashboard 2016 IN PROGRESS

10.- Transfer of key CSR indicators to thewebsite.

Website section 2017 IN PROGRESS

11.- Active collaboration with organizationsto develop CSR

Network with organizations 2016 COMPLETED

12.- Preparation of an annual non-financial

performance report

Annual CSR report 2016 COMPLETED

13.- Participation in internationalnon-financial reporting projects

Report on international trends and requirements 2016 COMPLETED

14.- Remaining or being including insustainability indexes

Overall 75% percentile assessment within the sectorin the Dow Jones Sustainability Indices (DJSI)

2017 COMPLETED

PROGRAM 03- HUMAN RIGHTS


15.- Approval of a Human Rights Policy Policy document 2016 IN PROGRESSNOT COMPLETED

16.- Reaching a global labor agreement onSocial Responsibility

Firm agreement involving Grupo Gamesa, tradeunion representatives and IndustriALL Global Union

2015 COMPLETED

17.- Implement the best corporate safety

standards for people and assets

Keep protocols operational and periodic safetyassessments on countries where the company operates.

2015 COMPLETED

18.- Ensure human rights training forsecurity personnel who work at Gamesawork centers

All security personnel working at Gamesa centershave received specific human rights training.

2017 IN PROGRESS

PROGRAM 04- FAIR LABOR PRACTICES


19.- Reduction in accident rates and

continued implementation ofpreventive action measures

10% reduction in the frequency rate (base 2014) 2017 COMPLETED

20.- Development of a safety cultureamong Gamesa’s employees andcontractors

Training campaigns - ThinkSafe Program(annual program)

2015 COMPLETED

21.- Development of a Diversity andInclusion Policy

Policy document 2015 COMPLETED

22.- Development of a culture of equalityand diversity

Development of tracking KPIs 2016 COMPLETED

23.- Ensure non-discriminatoryrecruitment and the inclusion of

women in areas, groups and positionswhere they have less representation

Control over the recruitment process 2016 COMPLETED

24.- Increase in the percentage of womenholding positions of responsibility

20% of positions of responsibility held by women in2018

2018 IN PROGRESS

25.- Career development and jobpromotion for all Gamesa personnel

At least 20 hours of training per employee per yearPerformance assessment at 65%

2016 COMPLETED

26.- Fulfillment of legal, labor and socialsecurity obligations for Gamesapersonnel

Labor audit at Gamesa centers 2017 IN PROGRESS

27.- Measurement of the level ofimplementation of good labor

practices at suitable intervals

Working environment survey 2017 COMPLETED

28.- Analysis of remuneration policies Statistical analysis on remuneration 2017 IN PROGRESS

29.- Promotion of a culture thatencourages the conciliation of workand personal life and co-responsibility

Awareness campaign and table on conciliationmeasures

2016 COMPLETED



PROGRAM 05 - RESPONSIBLE SUPPLY CHAIN


30.- Approval of a Supplier RelationshipPolicy

Policy document 2015 COMPLETED

31.- Development of an ethical code forsuppliers

Suppliers Code of Conduct 2015 COMPLETED

32.- Development of a supplierpre-qualification and registrationprocess

Procurement volume equivalent to €1.5 billion 2017 IN PROGRESS

33.- Development of a supplier CSR auditingprocess

Cumulative figure of 100 audits in the period 2017 COMPLETED

PROGRAM 06- LOCAL COMMUNITY


34.- Development of a new Social InitiativesPolicy

Policy document 2016 IN PROGRESS,NOT COMPLETED

35.- Setting up a new CSR Committee inIndia

CSR Committee India and rules of procedure 2015 COMPLETED

36.- A social initiative plan for Gamesa India Gamesa Community Spirit Plan 2015 COMPLETED

37.- Investment in social initiative projects Cumulative investment of almost half a million eurosbetween 2015 and 2017

2017 COMPLETED

PROGRAM 07 - THE ENVIRONMENT


38.- Development of a systematiccorporate environmental footprintcalculation system

Systematic calculation of the organization’senvironmental footprint

2017 COMPLETED

39.- Reduction in the generation of waste Global waste generation below 2,700 kg/MWmanufactured

2017 IN PROGRESS

40.- Increase in waste recovery andrecycling

Percentage of waste finally disposed of in landfillsbelow 20% (5% reduction on 2014 levels)

2017 IN PROGRESS

41.- Reduction in and stabilization ofwater consumption

Value below 25 M3/MW manufactured for operations 2017 IN PROGRESS

42.- Keep environmental management

certificates

Environmental management standard according to the

international ISO 14001 standard at all centers.

2017 COMPLETED

43.- Collaboration with research centersto preserve biodiversity

Creation of the first germplasm bank of Iberian bird ofprey species

2017 IN PROGRESS

44.- Verification of greenhouse gasemissions

Verification of the organization’s greenhouse gasemissions pursuant to the international ISO 14064standard

2017 COMPLETED

45.- Neutralization of CO2 emissions. Pathto carbon neutrality 2025

CO2 neutralization percentage between 2% and 12%(depending on the scenario) in 2017

2017 IN PROGRESS

46.- Supply of clean electric power All electric energy is clean and certified for all industrialplants and offices in Spain

2017 COMPLETED

47.- Performance of energy audits Implementation of energy efficiency audits by qualified

experts every four years.

2017 IN PROGRESS

48.- Added value in R&D and innovation Amounts allocated by Gamesa to R&D and innovationin clean energy cumulatively amounting to €128 millionover the period

2017 IN PROGRESS

49.- Improvement in Carbon DisclosureProject (CDP) indices

Situating the company at a CDLI score of 95 points (93points in 2014) and level B in the CPLI (level C in 2014).

2017 IN PROGRESS

50.- Active participation as a result ofCOP21

Playing an active role, setting out stance andparticipating in International corporate sector forums

2016 COMPLETED



Long-term risks and opportunities. Integrated risk management system.

ERM: Enterprise Risk & Opportunities Management

Gamesa is equipped with several Risk and Opportunities Control and Management Systems which areincluded under its corporate governance rules within an internal reference framework which we call ERM(Enterprise Risk & Opportunities Management). ERM is considered at the highest level, starting off, on theone hand, from the guidelines set forth in the Board of Directors Regulations and in its delegatedcommittees’ regulations – essentially the Audit and Compliance Committee Regulations (Articles 9 and 11) –and, on the other, from prestigious international methodologies.

The basis of ERM can be found in the General Risk Control and Management Policy8, which was approved bythe Board of Directors in 2015. This policy sets the bases and uniform general context upon which thefundamental elements of ERM are based to ensure the overall and specific systems fulfill a series of commonprinciples, including: management philosophy and goals, dynamic identification model, aggregation,assessment, risk mitigation and control, acceptable risk levels, communications, reporting and oversight,integrity, ethical values, powers and assignment of responsibilities.

ERM is applied across an organization and is structured around the four levels of protection and defense setout below to face and manage significant risks and opportunities:

1. Ownership of Risk Management: The Management Committee, the Executive Committee and each ofthe regions’ committees, as owners of the risks, are responsible for, among other matters: (i)managing integrated risk control over business processes and decision-making in all the geographicareas where the company operates; (ii) leading the setting and implementation of action plans; (iii)and ensuring fulfillment of the General Risk Control and Management Policy by assigning the necessaryresources (human, technology and financial resources).

As provided by the Investment and Financing Policy, the General Finance Department centralizesfinancial risk management for Grupo Gamesa as a whole. The Tax Department ensures the fulfillmentof the tax strategy and policy.

2. Monitoring and compliance: The Business Risk Control (BRC) Department takes part in setting the riskstrategy and ensures the effectiveness and proper operation of the control systems which mitigate anyrisks detected. It also safeguards executive guidelines and assesses all aspects connected with thecompany’s risks, including operational, technology, legal, social, environmental, political andreputation-related risks. The Ethics and Compliance Department is in charge of applying the Code ofConduct and the Internal Code of Conduct Regarding the Securities Market, as well as of monitoringthe implementation and fulfillment of the policy as set out in the Crime Prevention and Anti-FraudManuals.

3. Independent assurance: The Internal Auditing Department reports directly to the Board of Directorsthrough the Audit and Compliance Committee and informs, advises and reports independently on anyrisks to the Audit and Compliance Committee.

4. Supervision: Among other matters, the group’s Audit and Compliance Committee has been entrustedby the Board of Directors with the duties of: (i) periodically reviewing the internal control and riskmanagement systems’ effectiveness, including tax risks, to identify, analyze and properly report to theBoard about the main risks; (ii) ensuring that the risk control and management policy identifies thedifferent kinds of risks (operational, technology, financial, legal, reputation-related, etc. risks) faced bythe company and its group, including contingent liabilities and other out-of-balance risks amongfinancial risks, along with the risk levels the company and Grupo Gamesa deem acceptable accordingto their corporate governance rules.

8See Policy at: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-corporativo/politicas-corporativas/politicas-

riesgos/politica-general-de-control-y-gestion-de-riesgos.pdf



The establishment of the internal and externalcontexts under which Gamesa performs its operationsthrough proactive, process-integrated riskmanagement is accompanied by some risk tolerancelimits and several permanent ongoing controls forthe ERM’s main components (financial, tax, healthand safety, environmental and quality, reliability ofeconomic and financial reporting, information andasset security, ethics and compliance, corporate socialresponsibility components). This is achieved throughspecific policies and indicators, which always formpart of said limits and controls, fulfilling the goals laiddown by the prevailing Business Plan and acting at alltimes in strict fulfillment of the Law and thecompany’s corporate governance rules, particularlythe values and standards of conduct reflected in theCodes of Conduct, the Corporate Tax Policy’sprinciples and best practices and under the principleof zero tolerance for illegal acts and fraud, as theCrime Prevention and Anti-Fraud Policy sets forth.

The strategy and risk tolerance are set by senior management on the basis of quantitative (indicators) orqualitative variables which allow the amount of risk the company is willing to accept to reach its goals to beset. The tolerance level is updated periodically and at least each time amendments are made to the strategyand/or the policies.

• The Board of Directors approves the specific policies from which the risk levels which the Corporationconsiders acceptable are derived (risk tolerance criteria), which are geared at maximizing andprotecting Gamesa’s economic value within a controlled variability.

• Gamesa’s Executive Committee sets the specific numerical values of the risk limits set forth in specificpolicies and/or the targets set on an annual basis. Within this context, Gamesa’s Executive Committeereviewed and updated the specific numerical values of the risks connected with the Investment andFinancing Policy in 2016.

• The Audit and Compliance Committee ensures that the risk control and management policies identifythe risk levels the company deems acceptable in accordance with its corporate governance rules.

Once the risks which threaten fulfillment of the business goals have been identified, the owners of the risksconduct an assessment on them in order to ascertain their priority and levels of residual exposure in relationto the tolerance levels. Thus, they can set the measures said risks require (mitigation plans). All this isconducted under an overall risk management process and several sub-processes which support a top-down,bottom-up approach across the entire organization to ensure actions are taken and risk management issupervised and reported through the support provided by specific risk management systems, along withsuitable coherence between micro and macro-risks.

The ERM framework is supported by several cross-cutting elements, such as computer tools and IT platforms,audits, preventive observations, management reviews, events management, training activities andawareness raising on and promotion of a risk management culture:

• Several training sessions were given in 2016 to 159 managers and executives (1 st line of defense) atboth corporate and regional levels on the General Risk Control and Management Policy, the generalERM framework and integrated risk management methods. The training program will continue into2017.

• As far as awareness raising and an integrated risk management culture for the entire workforce areconcerned, it should be noted that the general circulation of Rule No. 3.25 on the Code of Conduct’srisk management covers all employees through the intranet. It was also distributed to the stakeholdersmost directly affected by it through the training sessions held on said Code in 2016 (Rule 3.25 sets outthat the group’s professionals should be proactive players in the risk prevention culture within thearea and scope of their duties through the integrated management of their activities and projects’risks. It also enumerates the relevant principles of actions). See sessions on the Code set out in SectionG4-57 (p. 78) of this CSR report.

Fig 2.- Gamesa's ERM Model



The systems are based on a universal standard risk classification model that uses common language in thecompany known as “Business Risk/Opportunity Model (BRM/BOM)”, the last update of which was approvedby the Board of Directors through the policy in 2015. BRM considers risks and opportunities in four groupswhich in turn are subdivided into several subcategories:

• Strategic and environmental risks

• Process risks (operational and financial risks)

• Risks related to reporting for decision-making or legal requirements

• Corporate governance, ethical and compliance risks

MAIN RISKS/OPPORTUNITIES AND THEIR CONTROL

In general terms, Gamesa’s Risk Control and Management Policy defines “risk” as any threat that an event,action or omission could prevent Grupo Gamesa from attaining its business goals and successfully carryingout its strategies. Hence, the Risk Control and Management Systems are linked to the company’s strategicplanning process and the setting of its goals, thereby contributing to the creation of value for the differentstakeholders and to the organization’s sustainable and profitable development.

When it puts its strategic and operational planning into place, Gamesa faces a variety of risks andopportunities which are inherent to the industry in which is performs its activities and to the countries whereit operates. Said risks could affect the attainment of the business goals set out in the prevailing Business Plan2015-2017.

In addition, threats, opportunities, overall trends and other risks are monitored which, even if they do nothave a direct short-term impact on the goals’ attainment, constitute priority areas of surveillance forGamesa, such as: the effects of climate change; natural disasters; geopolitical and social conflicts andterrorist attacks; risks connected to information system environments, like cyber-attacks and systemscontinuity; and risks related to Corporate Social Responsibility (CSR) like, for example, the risks affecting thesupply chain’s CSR.

The main risks Gamesa is exposed to that were monitored in 2016 as well as the response actions and theongoing control and supervision systems for said risks are grouped under four categories, which are set outbelow:

A) STRATEGIC AND ENVIRONMENTAL RISKS AND OPPORTUNITIES

These are risks and opportunities which arise as a consequence of choosing certain strategies or externalfactors that are beyond the company’s management and which might exert a significant direct or indirectinfluence on the attainment of its objectives and the company’s long-term vision.

Within this context, the risks set out below are included among the risk/opportunity factors that could affectthe goal of “Solid competitive positioning. Take advantage of growth opportunities in emerging andmarkets mature”:

From the standpoint of opportunities, the growing number of countries committed to renewable energies asa mechanism to contain climate change and the growing competitiveness of renewable sources of energystand out. These renwables include wind energy, which therefore sets the bases for a solid demand outlookin the short, medium and long-term. This support for renewable energies is clearly reflected in the speedwith which the Paris Agreement – signed on December 12, 2015 by 195 countries – entered into effect(November 4, 2016), while the growing competitiveness of wind energy was reflected in the outcomes of thenumerous energy auctions that took place in both emerging and mature countries over the course of 2016.These auctions reveal that wind energy is competitive when compared to traditional sources of energy in alarge number of regions.



Moreover, due to its geographic diversification (54 countries), Gamesa is in some cases exposed to “countryrisks”, which are construed as an environment where the sociopolitical conditions could affect local Gamesasubsidiaries (like, for instance, the effect of the Brazilian energy market affecting the country’s overallsituation). In other cases, it is exposed to more global risks resulting from macroeconomic factors, naturaldisasters, health threats and other emerging threats. This risk is characterized by a high degree of control andspeed of response due to a security model which ensures the continuity and security of the business, peopleand assets in countries where the company operates by managing early warnings (economic, social, politicaland health alerts), contingency and emergency plans, and management procedures.

Tax risks arise from local and/or global requirements and direct and indirect taxes. These risks are controlledthrough several mechanisms set forth in the Framework Tax Risk Control and Analysis Rule. Said controlsinclude periodic reporting actions to the company’s management and oversight bodies on the fulfillment ofgood tax practices concerning the prevention of tax risks and in relation to the tax authorities, along with theapplication of the Corporate Tax Policy, performance and control processes and procedures, and specificcontrols on the fulfillment of legal tax requirements by regions.

The pressure exerted on wind energy prices by other energy sources and competitors is monitoredperiodically by several of the company’s areas. Changes in technological, regulatory, market-related anddemand aspects are also monitored, as are any political changes which could have an effect on renewableenergies.

Regarding the industry’s consolidation, analyses and surveillance are conducted on movements in theindustry that could positively affect the goal of “Growth Beyond 2017”. It should be noted that Gamesa isclearly moving forward in the implementation of its long-term strategy (beyond 2017) by reaching a mergeragreement with Siemens Wind Power in 2016, in addition to making progress on the attainment of its annualeconomic and financial targets. This merger, which is based on solid strategic reasons, will enable two highlycomplementary companies as regards markets, businesses, customers, product portfolios and operating andmanagement capacities to be combined. After the merger, the new group will be in a position of offeroptimal CoE to its customers and maintain a sustainable value creation proposal in the medium andlong-term for the rest of its stakeholders (shareholders, employees, suppliers and communities in which ithas a presence).

B) OPERATIONAL AND FINANCIAL RISKS

OPERATIONAL RISKS: These risks are related to internal processes which are identified and managed insuch a way so they are integrated into business activities, such as risks connected to the ineffective and/orinefficient use of resources (cost overruns), the failure to meet deadlines, a lack of quality, supply chainaspects, management capacity, business continuity, corporate reputation and employee and management-related issues, which could lead to losses due to the absence or inadequacy of procedures, human resourcesand systems or due to external events and technology failures, among others.

Supply chain risks, including corporate social responsibility thereof: As a result of the geographicdiversification of Gamesa’s supply chain, ongoing monitoring and control are required to prevent anypotential effects on the business’s continuity that a failure in components and services suppliers couldhave and to ensure our suppliers observe Gamesa’s standards of conducts (which have been set out inthe Suppliers Code of Conduct for such purpose). In order to conduct this monitoring, Gamesaperforms a variety of control activities on the different stages of its relationship with suppliers, rangingfrom screening right up to the engagement process and the provision of the service or product inquestion, the following of which should be noted: screening of single suppliers, supplier audits (SQAand CSR audits), controls through the Achilles Platform and ethics and compliance checks.



Any risks which might affect the goal of attaining “the products and services portfolio’scompetitiveness and positioning improvements in mature markets” are already mitigated by theProduct Development Plan (G126-2.5 MW and G132-3.465 MW) in order to compete in advancedmarkets, as foreseen in the Business Plan. Work has been carried out on the products and servicesportfolio’s competitiveness by optimizing the start-up curve, return in terms of the cost of energy(CoE) and new developments’ contribution margin. The first order for the G132-3.465 MW windturbine was signed in the fourth quarter of 2016. The G126-2.5 MW turbine was chosen byWindpower Monthly as the year’s best wind turbine in the category of up to 2.9 MW and theG132-3.3 MW ranked fourth in the category of more than 3 MW.

As far as information security risks, including cyber-attacks, are concerned, Gamesa’s managementrecognizes as strategic assets any information and assets that provide it with support. It has thereforestated its determination to reach the security levels required to ensure their protection with regard toavailability, confidentiality, integrity, authentication and traceability. As part of this commitment,Gamesa is equipped with an information security model whose main pillar is the Information SecurityManual, which was approved in 2013 and applied to all areas which comprise the company. Bothgeneral and specific controls based on the manual for the protection of information systems havebeen implemented. The controls which have been designed are mostly based on SAP R3, SAP BPC,SAPP and BPM applications. These specific control activities include the following: backup copies toensure business continuity through the timely recovery of essential business data in the event of astoppage; physical access security at the data processing center (DPC); both internal and externalsoftware login security through techniques and tools that only restrict authorized people, dependingon their role or duties, when they login to computer applications and information databases; controlson computer application maintenance and implementation; and function segregation controls.

Other operational risks characterized by a high degree of control include any risks that can be insuredby third parties through the updating and annual review of the coverage set out in insurance policies.The risks included under the scope of external management system certifications which address somespecific risks are likewise characterized by a high degree of control, such as some specific risks likeoccupational hazard prevention (according to the OHSAS 18001 standard), environmental risks(according to the ISO 14001 standard) and quality risks (according to the ISO 9001 standard).

Additional references to some aspects of risks and opportunities that delve further into operational riskcontrols can also be found throughout this report.

FINANCIAL RISKS: Grupo Gamesa is exposed to several kinds of financial risk. These are controlled at acorporate level through a variety of action policies and principles, such as the Investment and FinancingPolicy, which aims to establish a common framework for: (i) the analysis, monitoring and control of the newinvestment or divestment projects of all the businesses which form part of Grupo Gamesa; (ii) the controland management of financial risks; (iii) the monitoring of risks related to the financing policy according toprevailing legislation and the general guidelines laid down the Risk Control and Management Policy; and (iv)the coverage of Grupo Gamesa’s financing needs. Further details on financial risks and the policies to controlthem are described in Notes 4 and 22 of the Report on the Consolidated Annual Accounts for 2016. Somefundamental aspects of said risks are described below:

Exchange rate risk: This risk is a consequence of the international transactions Grupo Gamesamakes in the ordinary course of its business. There are transaction flows in foreign currenciesrelated to the purchase/sale of projects and services, as well as financial flows in foreign currencies(part of the revenues and costs are denominated in US dollars, Indian rupees, Chinese yuan,Brazilian reales, Mexican pesos and, to a lesser extent, in other currencies other than the euro).There is also a potential effect of exchange rate variations on the results and cash flow generation.In order to reduce this exposure, a variety of actions are carried out and different controls are putinto place, including increasing local contents (supply of local components and production in themain regions where the company operates and sells products), hedging through the use of financialderivatives for highly probable transactions, continuous monitoring of exposure to fluctuations,



always observing fulfillment of the exchange rate hedging limit approved by the group, andsensitivity analyses of different exchange rate scenarios’ impact on the main figures (see Note 22 ofthe Report on the Consolidated Annual Accounts for 2016).

Market (price) risk: The price risk taken into account by the group is related to raw material prices,which Gamesa usually mitigates by transferring the risk onto customers through sales contracts.

Market (interest rate) risk: Grupo Gamesa makes use of external financing to perform part of itsoperations. It is therefore exposed to a rise in the interest rate of its borrowing. Variable-rate financingexposes the group to an interest rate risk in cash flows, which is partially offset by holding cash atvariable rates. Fixed-interest loans expose the group to reasonable value interest rate risks. Thehedging instruments specifically allocated to debt instruments have at most the same nominalamounts and the same maturity dates as the debt elements hedged by them (Note 22). Grupo Gamesamanages interest rate risks by periodically analyzing the exposure of its financing to interest rates andmaturity dates at least once a quarter. The percentage it wishes to hold at a variable or fixed rate isdetermined in each review, always doing so with a non-speculative approach.

Liquidity risk: Grupo Gamesa’s policy is to hold cash and bank and highly-liquid, non-speculative,short-term instruments at well-renowned financial institutions in order to be in a position to meet itsfuture commitments. An effort is also made to keep the financial debt’s composition in keeping withthe type of commitments to be financed. Hence, fixed assets are financed with permanent funds(equity and long-term debt) while working capital is financed with short-term borrowing. In 2016,Gamesa held on average credits which had not been drawn down totaling approximately 67.12% ofthe bank financing granted to it (66.42% in 2015).

Credit risk: Grupo Gamesa is exposed to credit risks to the extent by which a counter-party orcustomer fails to meet their contractual obligations. In this regard, sales of products and services aremade to customers which have a suitable credit rating and concerning which solvency tests have beenconducted. Moreover, large electric utility companies have a significant weight in Grupo Gamesa’scustomer portfolio. Mechanisms such as irrevocable credits and coverage through insurance policiesare used for customers without credit ratings for international sales to ensure collection. Furthermore,a financial solvency test is conducted on customers and specific terms and conditions aimed atensuring payment are included in contracts.

Risks that may affect ensuring the balance sheet and the results’ soundness: These risks are relatedto relevant issues affecting the activity which could lead to asset impairments, along with operationalrisks which could result in losses, factors that might affect control over working capital and structure,and positive offsetting factors that could lead to continuous improvement in variable costs. Theprevention and control actions include constantly monitoring cash flows, strict control over workingcapital investments and issues that are relevant to the activity which could lead to asset impairments.In this regard, any potential impairments are suitably itemized in the Report on the Annual Accountsfor 2016. Financial needs and the consequent fulfillment of covenants are likewise monitored andcontrolled.



C) REPORTING RELIABILITY RISKS

Reporting risks affecting decision-making or legal requirements are any risks which affect the reliability ofthe operational, financial or strategic reporting supplied internally or externally for decision-making or due tolegal requirements. In this context, the economic and financial reporting reliability requirements (includingthe risk of fraud) which apply to Gamesa as a listed company are included under the ICFR system, which wasdeveloped according to the international standards established by the Committee of SponsoringOrganizations of the Treadway Commission (COSO).

ICFR applies an internal control model with top-down approach to identify risks starting off from the mostsignificant accounts in the financial statements and taking into consideration parameters on impact,likelihood, the account’s characteristics and the business process. The identification process for risks whoseprobable impact on the financial statements is significant considers quantitative aspects (like the percentageat an aggregated level the individual company/account has in relation to assets, sales and profits) and otherquantitative aspects (on the account’s characteristics, the process’s characteristics and the risk of fraud).

The Board of Directors is the highest decision-making body in charge of supervising and approving thegroup’s financial statements. The group discloses reporting to the securities market on a quarterly basis. Saidreporting is prepared by the Management Control Department and the Finance Department, which performa series of control activities and the closure of accounts to ensure the reliability of the financial reporting.These controls are set out in the “Consolidation and Closure of Accounts” process of the group’s ICFR model.

Control activities on the following aspects are construed as especially relevant: recognition of revenue, workin progress and collection, capitalization of promotional expenses, warranty provisions, research anddevelopment activation expenses, tangible assets, hedging management, procurement, consolidation andclosure of accounts.

The group’s control model is based on, maintained and sustained through the GRC Suite tool.

The system is a continuous process in so far as the people responsible for the processes draw up, review andupdate control activities and procedures in conjunction with the Internal Control Unit.

D) ETHICAL AND COMPLIANCE RISKS

These are any risks related to the control over fulfillment of the company’s rules of corporate governance,including Gamesa’s codes of conduct and codes of conduct connected with other stakeholders (e.g. SupplierRelationship Code); and to fulfillment of legal requirements that apply and which may potentially apply,along with controls to prevent crimes, including fraud, bribery, corruption and others, from beingcommitted.

The following are among the main prevention measures for these risks:

Gamesa has a Code of Conduct, the current version of which was approved by the company’s Board ofDirectors on April 5, 2016. The Code of Conduct implements and formally sets out the values,principles, attitudes and standards which should govern the conduct of the companies making up thegroup. It also governs people in the performance of their duties and work, as well as in theircommercial and professional relationships in order to consolidate a universally accepted corporateethics.

Gamesa is likewise equipped with crime prevention manuals that are in accordance with therequirements (Criminal Codes) of the main regions where it operates. Said manuals include therelevant specific detection and prevention controls.

Pursuant to the provisions set forth in the Code of Conduct and Article 10(g) of the Audit andCompliance Committee Regulations on the said Committee’s duties on corporate governance topics,Gamesa has put into place a mechanism called the Whistleblowing Channel which allows its employeesto report any potentially significant irregularities confidentially, including financial and accountingirregularities, they may detect in the company. The channel is regulated through a written procedureknown as “Rules on the Whistleblowing Channel’s Operation”. Once the investigation phase of agrievance has been completed, the Ethics and Compliance Department draws up a report whose



deadlines contents and disclosures rules are predetermined. The Human Resources Department holdsresponsibility for establishing the relevant penalties, which should in any event be proportional to theseverity of the breaches. It is the Ethics and Compliance Department’s duty to evaluate and draw up anannual report on the Code of Conduct’s degree of fulfillment, which is brought before the Audit andCompliance Committee.

Additional references to the prevention controls for this kind of risks can also be found throughout thisreport.

BALANCE OF RISK AND OPPORTUNITY MANAGEMENT

The following actions carried out in 2016 are among the ongoing control, supervision and response actionsapplied to all kinds of risk:

• Control exercised by business unit and geographic area managers and the Management Committee’soversight of the evolution of risk maps and mitigation plans.

• Reports to the Audit and Compliance Committee on the corporate risk map’s evolution and individualreports on significant risks drawn up in 2016, as well as through appearances by managers focusing onthe supervision of specific risk controls and different financial risks (accounts receivable, workingcapital and exchange rate), along with balance sheet, tax, services business unit, legal, ethical andcompliance risks.

• Internal audits conducted on significant risks and submission of the corresponding reports to theManagement Committee and the Audit and Compliance Committee.

• Risk management in Gamesa’s ERM evolves by applying the principle of continuous improvement,audits, self-assessments, benchmarking, as well as by taking into consideration renowned references.The assessment conducted by Euskalit in 2016 on Gamesa’s overall management (and, as part of it, onthe ERM’s management) according to the advanced management model should be highlighted(Gamesa’s management model was granted a gold quality award).

Risk management as a support and catalyst for the attainment of goals is evident, as Gamesa ended 2016after having attained not only its economic and financial targets early, which were clearly exceeded, but alsothe strategic objectives set out in the Business Plan 2015-2017 one year in advance.

CORPORATE RESPONSIBILITY REPORT 2016 | PART I. GENERAL DISCLOSURESSection I.02. Organizational Profile


I.02.- ORGANIZATIONAL PROFILE

G4-3 Name of the organization

Gamesa Corporación Tecnológica, S.A.

G4-4 Primary brands, products and services

GAMESA CORPORACIÓN TECNOLÓGICA, S.A. is a global technology group specializing in the design,manufacture, installation, operation and maintenance of wind turbines, as well as in wind farm development,construction and sales. The company is equipped with its own vertically integrated wind turbine design andtechnology development capacity. This capacity includes the manufacturing of blades and blade molds, rootjoints, gearboxes, generators, converters and towers (outsourced in some countries), along with theassembly of wind turbines.

Gamesa has extensive experience in the wind energy sector and stands out for:

Being a global manufacturer of reference which installed 4,262 MW in 2016 and has installed 38.9GW of capacity over the last 22 years. The wind power it has installed is beneficial for theenvironment and to combat climate change, since it leads to a 58.3-million-ton reduction in CO2

per year, a reduction in pollutant emissions into the atmosphere which are equivalent to replacingthe use of 8.3 million tons of petroleum each year (TEP/year).

Having of a wide range of technologies and services, with product platforms that allow it to meetthe needs of all customer segments in the wind energy industry.

Maintaining research and development centers in Spain (Pamplona, Madrid and Zamudio) andengineering firms domiciled in India, Asia Pacific, United States, Latin America and Brazil, alongwith an R&D investment capacity amounting to around €66 milling. It is among the 320 Europeancompanies with the highest R&D investment levels and has a patent application portfolio of 816applications in all the markets in which it operates.

Having a global organization with global production in Spain and China and local productioncapacity in India and Brazil.

Grupo Gamesa’s reportable segments are adapted its business units’ configuration and to the financialreporting and management used by the group’s executive management bodies, which are as follows:

2BUSINESS

UNITS

WIND TURBINES O&M SERVICES

Technology solutions aimed atensuring the profitability targetsof wind project which Gamesaand other manufacturers' windturbines.24 GW in operations andmaintenance for more than 400clients.

89.8% ofrevenue

10.2% ofrevenue

Sales channel

Wind turbine design andmanufacturing:Technology leader with the broadest andmost versatile product catalog in themarket with four highly competitiveplatforms.Wind turbine sales:The best partner for your wind energyprojects, endorsed by its 39 GW ofcumulative installed capacity.

Wind farm development 8.3 GW in cumulative

developments.



Wind turbines

The wind turbines developed and manufactured by Gamesa have evolved significantly since its first windturbine was manufactured in 1994 by incorporating the latest advances in technology. Not only has theirpower increased, so has their performance for the company’s customers.

The company is ranked among the world’s technology leaders in the multimegawatt segment with over 38.9GW installed in 54 countries and four product platforms (Gamesa 2.0 MW, Gamesa 2.5 MW, Gamesa 3.3MW and Gamesa 5.0 MW)

The hallmarks of this broad product catalog are its products’ robustness, high reliability and adaptability to allkinds of sites and wind conditions, ranging from the most demanding and harshest sites to locations havingmedium and low wind speeds.

All of this is based on the company’s extensive experience gained over its 22 years of activity, which havemade Gamesa the best possible partner for its customers’ wind power projects.

Fig 3.- Evolution of the cumulative wind power installed by Gamesa

The multimegawatt wind turbines of the Gamesa 2.0 MW platform make it possible to attain morecompetitive investment per MW installed to cost of energy produced ratios. This is possible thanks to theversatile combination of a 2.0 MW unit power turbine and six blades of different dimensions measuring 80,87, 90, 97 and 114 meters in diameter to achieve maximum performance in all kinds sites and windconditions. A total of 26 GW of this platform has been installed in 39 countries.

Gamesa launched its Gamesa 2.5 MW platform in order to improve the cost of energy in the 2.0-3.0 MWpower segment. It is a new item in its product catalog and the logical evolution of the 2.0 MW platform.

With three new rotors measuring 106, 114 and 126 meters, new tower options and increased rated power,the Gamesa 2.5 MW platform complements Gamesa’s 2.0 MW product offering, a point of reference in themarket due to its outstanding power factors and high profitability levels.

Proof of this is the fact that the G126-2.5 MW has recently been ranked by Windpower Monthly as the bestwind turbine in the than 3 MW category in 2016.



One of the keys to Gamesa’s success is the constant development of new advanced products adapted to itscustomers’ needs in any kind of site and which offer outstanding profitability.The new Gamesa 3.3 MW platform was conceived with this aim in mind and its first model is the G132-3.3MW wind turbine for Class II sites, a new-generation multimegawatt turbine placed on the market to becomethe very best cost-of-energy solution in the 3.0-3.6 MW segment.

The Gamesa 5.0 MW platform is the result of the evolution in technology and exemplifies that Gamesa hasthe know-how, experience and resources needed to develop wind turbines capable of extracting themaximum amount of energy possible from the wind. Gamesa aims to position itself in the multimegawattsegment with this new range of products.

Table 4.- Wind turbines: Product range

Gamesa 2.0 MW G802.0 MW

G872.0 MW

G902.0 MW

G972.0 MW

G1142.0 MW

G1142.1 MW

Rotor diameter (m) 80 87 90 97 114 114

Swept area (m2) 5,027 5,945 6,362 7,390 10,207 10,207

Rotation speed 9.0-19.0 rpm 9.0-19.0 rpm 9.0-19.0 rpm 9.6-17.8 rpm 7.8-14.8 rpm 7.8-14.8 rpm

Blade length (m) 39 42.5 44 47.5 56 56

Height of the tower (m) 67, 78 and 100 78 and 90 55, 78 and 90 78, 90, 100,104 and 120

80, 93, 125depending on

site

80, 93, 106, 125,153 depending

on site

Class IA IA IA IIA / IIIA /CS IIA /IIIA IIIA / CS


G1142.5 MW

G1142.625 MW

G1262.5 MW

G1262.625 MW

Rotor diameter (m) 106 114 114 126 126

Swept area (m2) 8,825 10,207 10,207 12,469 12,469

Rotation speed 7.7-14.6 rpm 7.7-14.6 rpm 7.7-14.6 rpm 7.7-14.6 rpm 7.1-12.9 rpm

Blade length (m) 52 56 56 62 62

Height of the tower (m) 72, 80 and 93depending on site

68, 80, 93, 125depending on site




Class IA IIA IIA IIIA IIIA


G1323.465 MW

Rotor diameter (m) 132 132Swept area (m

2) 13,685 13,685

Rotation speed 6.82-10.9 rpm 6.82-10.9 rpmBlade length (m) 64.5 64.5Height of the tower (m) 84, 97, 114, 134, 154 depending on site 84, 97, 114, 134, 154 depending on siteClass IIA IIA

Gamesa 5.0 MWG128

5.0 MWG132

5.0 MW

Rotor diameter (m) 128 132Swept area (m

2) 12,868 13,685

Rotation speed 12 rpm 12 rpmBlade length (m) 62.5 64.5Height of the tower (m) 81, 95, 120 and 140 95, 120, and 140Class IA/IIA IIA

For further information on the product range, see the Gamesa website at: http://www.gamesacorp.com/es/productos-servicios/aerogeneradores/



Operations and Maintenance (O&M)

Gamesa also provides an integrated solution complemented by a broad offering of operations andmaintenance (O&M) services and long-term warranties. It offers a full range of services dedicated to themaintenance of 24,311 MW at the end of 2016. Operations and maintenance services include predictive,preventive and corrective maintenance activities, along with a wide range of technology solutions, including:

G4-5 Headquarters

Gamesa Corporación Tecnológica, S.A.Parque Tecnológico de Bizkaia,Edificio 222.48170 Zamudio, Vizcaya, Spainwww.gamesacorp.com

Advanced solutions portfolioTechnology solutions aimed at meetingthe profitability targets of our customers'projects

Energy Thrust

Optimized control software and hardwareenhancements which increase production

of all Gamesa platforms by up to 5%.

Life Extension Program

Maximizes return by extending the usefulservice life of a wind turbine by 10 years.

Overhaul

Conversion of a V47 turbine into a G47turbine by renewing electrical and

electronic components that increaseproduction by up to 10%.

Multi-Brand Offer

O&M services, component reconditioning,enhancement sand solutions for Gamesa

in-house technology and that of othermanufacturers.

Fire SuppressionSystem

A system which minimizes damage to windturbine components caused by fire, thereby

reducing its economic impact.

WindOne®Customers

A centralized system which enables remotereal-time monitoring of wind farms.

MEGA Gamesa's forecasting tool for wind powerproduction and a weather risk managementsystem. Through the WINDONE® platform.

SAG The Gamesa self-help system, a premiumdevice which makes it easier for maintenance

technicians to lower or raise the nacelle.

WindCore &WindOne

A complete centralized control center whichallows all customers to monitor and operate

from the same operating system.

Gamesa University A global network of centers specializing inensuring continuous training and the transfer

of the company's know-how abouttechnological advances in Gamesa products

and services.

SCADA solutions WindNet® PRO is a wind farm control andcontinuous monitoring software.



G4-6 Countries where there are significant operations

Table 5.- Gamesa’s presence in countries at 2016 year-end

1. Germany (197) (50)2. Algeria (10) (10)3. Argentina (11)4. Australia

5. Azerbaijan (8)6. Belgium (25) (18)7. Brazil (2,153) (2.066) (1)8. Bulgaria (90) (90)9. Canada (16) (27)10. Chile (211) (103)11. China (4,504) (932) (3)12. Cyprus (20) 13. Korea (3)14. Costa Rica (143) (108)15. Cuba (5)16. Ecuador (2) 17. Egypt (780) (200)18. Spain (12,203) (7,620) (13)19. United States (4,860) (2,167)20. Philippines (144) (144)21. Finland (123) (123)22. France (854) (522)23. Greece (276) (185)24. Honduras (176) (176)25. Hungary (182) (24)26. India (4,043) (3,616) (2)27. Ireland (54) (61)28. Mauritius (9) (9)29. Israel (21) (21)30. Italy (1,729) (1,100)31. Jamaica (24) (24)32. Japan (110) (62)33. Jordan (66) (66)34. Kenya (14) 35. Morocco (238) (238)36. Mauritania (30) (30)37. Mexico (2,047) (1,698)38. Nicaragua (44) (44)39. New Zealand (15) (7)40. Poland (763) (703)41. Portugal (494) (494)42. Puerto Rico (1) 43. United Kingdom (757) (578)44. Dominican Rep. (52) (52)45. Romania (314) (304)46. Sri Lanka (45) (40)47. Sweden (108) (103)48. Thailand (60) (10)49. Taiwan (12)50. Tunisia (242) 51. Turkey (166) (145)52. Uruguay (326) (340)53. Venezuela (71)54. Vietnam (1) Cumulative total (38,875) (24,311) 4(19)

Total countries 54 41 4

Operations &maintenance activity (MWytd)

Training centers (University) Main commercialoffices

Technologicaldevelopment activity

Manufacturing Activity(No. of factories)

Wind turbine installationactivity (MW ytd))

Corporate offices



G4-7 Nature of ownership and legal form

Share capital

Gamesa Corporación Tecnológica, S.A.’s share capital amounted to €47,475,693.79 at December 31, 2016,consisting of 279,268,787 common shares with a par value of €0.17 each, represented by book entries.

All the shares are fully subscribed and paid up and confer the same rights. There are no different classes orseries of shares. The company is listed on the Bilbao, Madrid, Barcelona and Valencia stock exchanges. Gamesashares have been admitted to trading through the Stock Exchange Interconnection System (ContinuousMarket) since December 31, 2000 and are included in the IBEX-35 index.

Table 6.- Evolution of share capital

Date Share capital (€) Shares

Book building process 08/09/14 47,475,693.79 279,268,787

Paid-up capital increase 25/07/12 43,159,721.89 253,880,717



3 x 1 par value split 28/05/04 41,360,983.68 243,299,904

Capital increase (raising the par value of shares) 28/05/04 41,360,983.68 81,099,968

Stock market flotation 31/10/00 40,549,984.00 81,099,968

Significant shareholders and % interest

Table 7.- Shareholding structure (at December 31)

2016 2015 2014 2013 2012

Iberdrola, S.A. 19.69% 19.69% 19.69% 19.69% 19.69%Norges Bank 3.21 % - 3.02% 3.29% -

Blackrock Inc.9 - 3.17% 3.21% 4.83% 4.83%

Fidelity International Limited10 1.06% 1.10% - - -

OZ Master Fund Ltd.11 2.04 % - - - -

Dimensional Fund Advisors LP - - 2.68% 2.94% -

Others12 74.00 % 76.04% 71.40% 69.24% 75.48%

9According to the National Securities Market Commission’s records, Blackrock Inc. held part of its interest (0.166%) in the share capital of

Gamesa Corporación Tecnológica, S.A. at December 31, 2015 through voting rights linked to the exercising of financial instruments.10

Significant interest pursuant to Article 32 of Royal Decree 1362/2007 of 19 of October on shareholders obliged to give notice of their

interest for being domiciled in a tax haven or in a country or territory of no taxation or with which there is no effective interchange of tax

information.11

Significant interest entirely based on voting rights linked to the exercising of financial instruments. Significant interest pursuant to Article

32 of Royal Decree 1362/2007 of 19 of October on shareholders obliged to give notice of their interest for being domiciled in a tax haven or

in a country or territory of no taxation or with which there is no effective interchange of tax information.12

Each holding interests of less than 3%



Corporate structure

Information on the consolidated companies which comprise Grupo Gamesa is provided in the consolidatedannual accounts report for 2016. The group has initiated a process to adapt its corporate organization to adecentralized matrix model of management by regions, which are as follows:

Europe and Rest of the World (including Mexico): Comprised by companies dedicated to wind turbinedesign and manufacturing like Gamesa Eólica, S.L. Unipersonal; Gamesa Innovation and Technology, S.L.Unipersonal, as well as to the development and sale of wind farms like Gamesa Energía, S.A.Unipersonal and Gamesa Inversiones Energéticas Renovables, S.A. Unipersonal.

United States: Comprised by Gamesa Technology Corporation Inc. and its subsidiaries, which includeGamesa Wind US LLC as the most significant.

India: Comprised by Gamesa Renewables Private Limited Co. and its subsidiaries.

Brazil: Comprised by Gamesa Eólica Brasil, Sociedad Limitada.

China: Comprised by Gamesa Wind Beijing and Gamesa Wind Tianjin as the most significant companies.

The Extraordinary General Meeting of Gamesa Corporación Tecnológica, S.A. held on 25 October resolved toapprove the merger with Siemens Wind Power and the integration of its wind power assets through a swap ofnewly issued shares equivalent to 59% of share capital. The merger of Gamesa with Siemens’ wind powerbusiness was officially announced as a Relevant Disclosure

13at the registry of the Spanish Securities Market

Commission (CNMV) on April 3, 2017.

Gamesa became the owner of all the share capital of the company 9REN España, SL. through the acquisition ofFirst Reserve’s entire interest on December 30.

G4-8 Markets served

Gamesa supplies the products and services set out under indicator G4-4 (p. 21) in the countries where thecompany operates, which are listed under indicator G4-6 (page 25).

G4-9 Scale of the organization

Employees

Table 8.- Number of employees by region

2016 2015 2014 2013 2012

CORPORATE 1,377 - - - -EMEA 3,243 3,814 3,812 3,863 4,233APAC 686 615 582 525 537USA 440 361 349 408 613INDIA 2,826 1,567 1,035 846 813BRAZIL 553 509 303 112 78LATAM 242 112 - - -Rest of the World (ROW) - 293 350 305 349

Total workforce 9,367 7,271 6,431 6,079 6,646Note: Reported in 2016 according to a geographical realignment

13See CNMV link: Registration number: 250259 https://www.cnmv.es/Portal/HR/verDoc.axd?t={4bddb925-9706-477c-a6fc-2aae990dcaaf}



Sales

Table 9.- Sales/revenue by countries/regions representing 5% or more of total revenue(net turnover in € million) 2016 2015 2014 2013 2012

Spain 239 312 297 217 254

Rest of Europe 659 428 288 250 496

United States 555 469 381 49 484

China 199 275 126 11 251

India 1,379 814 478 466 293

Brazil 447 620 531 424 281

Mexico 439 179 360 555 360

Rest of the world 695 406 386 363 245

Net turnover 4,612 3,504 2,846 2,336 2,665

Costs

Table 10.- Net costs included in the operating result by category(expressed in € million) 2016 2015 2014 2013 2012

Procurement costs 3,239 2,478 1,996 1,390 1,825

Personnel expenses 408 341 303 309 365

Depreciation and provisions 282 229 175 154 415

Other operating expenses 405 307 297 258 317

Net (gains) losses from asset impairment or assetdivestment

2 (32) 8 7 289

Total costs 4,335 3,323 2,779 2,118 3,211

Capitalization

Table 11.- Total capitalization(expressed in € million) 2016 2015 2014 2013 2012

Subscribed share capital 47 47 47 43 43

Parent company’s equity 1,765 1,527 1,385 1,013 1,021

Net financial borrowing (cash and bank) 14(682) (301) (143) 420 495

Tangible fixed assets 1,252 1,106 1,015 1,061 1,036

Cumulative depreciation (694) (606) (538) (517) (468)

Impairment (138) (140) (144) (166) (166)

Products and services provided

Table 12.- Products and services provided

2016 2015 2014 2013 2012

MWe of wind energy sold 4,332 3,180 2,623 1,953 2,119

14Net financial borrowing construed as financial debt, including subsidized loans, derivative Instruments and other current financial liabilities

minus other current financial assets and cash and bank.



Table 13.- Wind turbines: Track record of MW installed by country

(in MW) YTD2016

Additions2016

Additions2015

Additions2014

Additions2013

Additions2012

Cumulative2011-1994

1. Germany 210 14 12 8 - 16 1612. Algeria 10 - - - 10 - -3. Argentina 11 - - - - - 114. Azerbaijan 8 - - - - - 85. Belgium 25 8 18 - - - -6. Brazil 2,153 345 940 416 356 96 -7. Bulgaria 90 - - - - - 908. Canada 16 - - 6 - 10 -9. Chile 211 175 - 36 - - -10. China 4,504 498 434 62 257 493 2,76011. Cyprus 20 - - - - - 2012. Korea 3 - - - - - 313. Costa Rica 143 80 10 40 - - 1314. Cuba 5 - - - - - 515. Ecuador 2 - - - - - 216. Egypt 780 174 - 118 82 - 40617. Spain 12,203 - 1 2 56 393 11,75318. United States 4,860 521 194 224 - 509 3,41219. Philippines 144 - 76 68 - - -20. Finland 123 - - 92 3221. France 854 66 24 44 60 20 64022. Greece 276 3 94 - 7 17 15523. Honduras 176 - - 74 - - 10224. Hungary 182 - - - - - 18225. India 4,043 1,471 883 569 376 222 54726. Ireland 54 - - - - - 5427. Israel 21 - 21 - - - -28. Italy 1,729 16 44 - 16 228 1,42529. Jamaica 24 - 24 - - - -30. Japan 110 - - - - - 11031. Jordan 66 - 66 - - - -32. Kenya 14 - - 14 - - -33. Kuwait 10 10 - - - - -34. Morocco 238 - - - - - 23835. Mauritius 9 - 9 - - - -36. Mauritania 30 - 30 - - - -37. Mexico 2,047 380 166 450 350 360 34138. Nicaragua 44 - - - - 44 -39. New Zealand 14 - 7 - - - 840. Poland 763 - 100 38 58 39 52941. Portugal 494 - 56 - - 8 43042. Puerto Rico 1 - - - - 1 -43. United Kingdom 757 282 - 24 192 21 23844. Dominican Republic 52 - - - - 52 -45. Romania 314 - 30 10 - 62 21246. Sri Lanka 45 - - 10 5 10 2047. Sweden 108 - 51 16 14 - 2748. Thailand 60 52 8 - - - -49. Taiwan 12 - - - - - 1250. Tunisia 242 - - 11 28 33 17151. Turkey 166 42 28 28 38 - 3052. Uruguay 326 126 50 50 100 - -53. Venezuela 71 - - 1 41 - 2954. Vietnam 1 - - - - - 1

Total 38,875 4,262 3,354 2,421 2,071 2,625 24,143



Fig 4.- Wind turbines - Track record of MW installed by Gamesa

Table 14.- Wind turbines: Track record of MW installed by region and platform model

(in MW) Made Gamesa660 KW

Gamesa850 KW

Gamesa2.0 MW

Gamesa2.5 MW

Gamesa5.0 MW

Total MWinstalled

APAC 1 - 17 824 - - 842BRAZIL - - - 2,153 - - 2,153CHINA 22 7 2,322 1,654 - - 4,006EMEA 1,521 2,013 5,148 10,730 208 178 19,798INDIA 44 - 936 3,108 - - 4,088LATAM 75 11 310 2,662 - 55 3,113USA - - 57 4,818 - - 4,876

Total 1,664 2,031 8,791 25,949 208 233 38,875

Fig 5.- Cumulative MW installed (by region) Fig 6.- Cumulative MW installed (by platform)

16 15148 125

253

640 708911 928 954

1,5271,321

2,296

3,0043,168

2,231

2,587

3,309

2,625

2,071

2,421

3,354

4,262

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Cu

mu

lati

veM

W

MW

/yea

r

MW per year

Cumulative MW

APAC2%

BRAZIL6%

CHINA10%

EMEA51%

INDIA10%

LATAM8%

NORTHAMERICA

13%

APAC

BRAZIL

CHINA

EMEA

INDIA

LATAM

NORTH AMERICA

Gamesa 5.0MW1%

Gamesa 2.5MW0%

Gamesa 2.0MW67%

Gamesa 850kW23%

Gamesa 660kW5%

Made4%

Gamesa 5.0 MW

Gamesa 2.5 MW

Gamesa 2.0 MW

Gamesa 850 kW

Gamesa 660 kW

Made



Table 15.- Operations and Maintenance: Track-record of MW in Operations & Maintenance

(in MW) MADE G4X G5X G8X G9X G114 G126 G10X Others Total MW

1. Germany - - 2 36 12 - - - - 502. Algeria - - 10 - - - - - - 103. Belgium - - - - - 18 - - - 184. Brazil - - - 192 1,534 340 - - - 2,0665. Bulgaria - - - 90 - - - - - 906. Canada - 11 - - 16 - - - - 277. China - - 40 64 828 - - - - 9328. Chile - - - 36 - 52 - 15 - 369. Costa Rica - - - 108 - - - - - 10810. Egypt - - - 200 - - - - - 20011. Spain 381 1,188 2,036 3,731 144 - 3 46 92 7,62012. United States - - 59 1,194 498 410 - - 6 1,55813. Philippines - - - - 144 - - - - 14414. Finland - - - - - - - 123 - 12315. France - 4 120 294 96 - - - 8 52216. Greece - - 74 82 4 - - - 25 18517. Honduras - - - 152 24 - - - - 17618. Hungary - - - 24 - - - - - 2419. India 24 - 904 - 2,576 112 - - - 3,61620. Ireland - - 27 15 - - - - 19 6121. Israel - - 21 - - - - - - 2122. Italy - - 521 354 118 30 - - 77 1,10023. Jamaica - - - 24 - - - - - 2424. Japan - - - 62 - - - - - 6225. Jordan - - - - 66 - - - - 6626. Morocco - - 216 22 - - - - - 23827. Mauritius - - 9 - - - - - - 928. Mauritania - - - - 30 - - - - 3029. Mexico - - 209 1,106 268 115 - - - 1,69830. Nicaragua - - - 44 - - - - - 4431. New Zealand - - 7 - - - - - - 732. Poland - - 9 590 88 16 - - - 70333. Portugal - - - 430 14 - - 50 - 49434. United Kingdom - - 65 390 4 - - - 120 57835. Dominican Rep. - - - - 52 - - - - 5236. Romania - - - 274 30 - - - - 30437. Sri Lanka 20 - 10 - 10 - - - - 4038. Sweden - - 2 20 58 24 - - - 10339. Thailand - - - - - 10 - - - 1040. Turkey - - - 52 52 41 - - - 14541. Uruguay - - - 50 150 120 - - 20 340

Total 425 1,203 4,341 9,587 6,816 1,287 3 234 367 24,311



G4-10 Workforce

Table 16.- Workforce by country and gender

2016 2015 2014 2013 2012Men Women Men Women Men Women Men Women TOTAL

1. Germany 23 8 20 6 19 4 16 4 232. Australia 1 - - - 1 1 2 2 43. Brazil 458 95 418 91 245 58 79 33 784. Bulgaria 1 - 1 - 2 - 2 - 65. Canada 3 - - - - - - - -6. Chile 14 2 2 1 1 - 1 - -7. China 518 147 470 145 442 140 386 139 5378. Costa Rica 1 - 2 - 3 - 1 - -9. United States 369 69 302 59 293 56 346 62 61310. Egypt 14 1 10 1 12 1 14 1 1611. Spain 3,054 1,182 2,702 1,112 2,704 1,108 2,746 1,117 4,23312. Philippines 7 1 5 1 - - - - -13. Finland 14 - 14 - 9 - 4 - -14. France 21 9 19 8 19 9 18 7 3215. Greece 13 2 13 2 12 2 12 2 2116. Honduras 2 - 2 - 2 - 1 - -17. Hungary 3 - 3 - 3 - 3 1 518. India 2,759 56 1,523 44 998 27 820 26 81319. Ireland 16 2 2 1 2 1 1 1 120. Italy 62 13 62 11 62 14 64 14 9521. Japan 1 - 1 - 1 - 1 - 122. Morocco 7 - 6 1 6 1 6 1 823. Mexico 125 64 73 39 47 16 36 12 3824. Nicaragua 1 - - - - - - - -25. Poland 20 7 20 6 21 6 22 5 3126. Portugal 6 4 7 5 6 4 8 4 1727. United Kingdom 129 16 15 8 31 7 29 5 4428. Romania 6 1 9 2 9 2 11 2 1329. Singapore 1 - - - - - 1 - 630. Sri Lanka 11 - 9 - 10 - - - -31. Sweden 8 2 8 2 6 1 6 1 632. Thailand 2 4 - - - - - - -33. Turkey 6 1 5 1 5 1 4 - 434. Dominican Rep. - - 1 - - - - - 135. Uruguay 4 1 1 - 1 - - - -Subtotal 7,680 1,687 5,725 1,546 4,972 1,459 4,640 1,439 -

Total workforce 9,367 7,271 6,431 6,079 6,646

Table 17.- Workforce by type of employment contract and gender


Permanent workers 7,043 1,543 5,234 1,441 4,601 1,365 4,247 1,332 6,156Temporary workers 637 144 491 105 371 94 394 106 490Subtotal 7,680 1,687 5,725 1,546 4,972 1,459 4,640 1,439 -

Total workforce 9,367 7,271 6,431 6,079 6,646

Table 18.- Workforce by type of employment and gender


Direct workers 3,303 256 2,065 218 1,493 210 1,354 230 1,878Indirect workers 2,011 267 1,578 232 1,416 198 1,511 251 2,175Structural workers 2,366 1,164 2,082 1,096 2,063 1,051 1,776 957 2,593Subtotal 7,680 1,687 5,725 1,546 4,972 1,459 4,640 1,439 -

Total workforce 9,367 7,271 6,431 6,079 6,646



Fig 7.- Average age of workforce 2016 Fig 8.- Workforce by type of employment contract 2016

Table 19.- Global workforce (internal and external personnel)

2016 2015 2014 2013 2012INTERNAL EXTERNAL INTERNAL EXTERNAL INTERNAL EXTERNAL INTERNAL EXTERNAL INTERNAL EXTERNAL

CORPORATION 1,377 14 1,350 9 1,206 5 1,212 6 1,254 15O&M - - - 842 4 799 7 787 4EMEA 3,243 145 2,802 17 2,047 1 2,128 1 2,526 2LATAM 242 27 154 1 67 2 48 - 38 -BRAZIL 553 1 509 4 303 5 112 4 78 7USA 440 1 360 3 349 3 408 2 613 8APAC 686 63 637 62 582 49 525 1 537 2INDIA 2,826 354 1,576 159 1,305 56 847 42 813 26Subtotal 9,367 605 7,388 255 6,431 125 6,079 63 6,646 64

Total workforce 9,972 7,643 6,556 6,142 6,710

Fig 9.- Evolution of global workforce Fig 10.- Evolution of global workforce by areas

G4-11 Employees covered by collective agreements

In general terms, Grupo Gamesa’s collective agreements apply to all workers who provide their servicesunder or at group companies, regardless of the way they were hired, the professional group they have beenassigned to, their occupation or the job they perform.

However, issues connected to the company’s own business organization, each country’s legislation and eventhese countries’ customs and practices means that certain groups are expressly excluded from the scope ofthese collective agreements. This is the reason why 100% coverage has not been attained, as indicated in thefollowing table:

40 4136 34

3033 35

0

5

10

15

20

25

30

35

40

45

2016

1,3632,849

440

371

2,771 551 241

0%10%20%30%40%50%60%70%80%90%

100%

Permanent Temporary

6,7106,142 6,556

7,643

9,972

0

2,000

4,000

6,000

8,000

10,000

12,000

2012 2013 2014 2015 2016

Internal External Total Headcount

1,391

0

3,388

441

749

3,180

554269

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2012 2013 2014 2015 2016



Table 20.- Employees covered by collective agreements(percentage in the region between brackets) 2016 2015 2014 2013 2012

EMEA 3,915 (89.2%) 1,404 (34.3%) 1,298 (31.2%) 1,377 (33%) 1,658 (36%)USA - - - 63 (15.4%) 186 (30.3%)APAC - - - - -INDIA - - - - -BRAZIL 396 (71.6%) 324 (63.7%) 166 (54.8%) 29 (25.9%) 22 (28.2%)LATAM - - - - -Total covered 4,311 1,728 1,464 1,469 1,866

% of total workforce 47.4% 23.7% 22.7% 24.1% 28.2%

The first collective agreement for Gamesa’s15 office workers was signed in 2016, representing a milestone forthe company since it set out a single framework of working conditions for all its offices in Spain.

This agreement entered into force immediately after its approval in April and applies to all Gamesa’s officeemployees in Spain (1,900 people). This is the reason why the data for 2016 is markedly higher than the datafor 2015.

G4-12 Description of the supply chain

Gamesa’s positioning

One of the objectives of Gamesa and the companies which comprise Grupo Gamesa is to create relationshipswith suppliers, contractors and collaborators which are based on trust, reporting transparency and sharedknowledge, experience and capabilities.

Gamesa’s overall stance on the supply chain is set out in detail in the Gamesa Supplier, Contractor andCollaborator Contracting and Relationship Policy through a text16 approved by a resolution taken by theBoard of Directors on September 23, 2015. This declaration has an incidence on the principles upon whichGrupo Gamesa intends to base an overall framework to control and manage the risks resulting fromprocurement and works and services contracting activities by taking the principle of creating value for thedifferent stakeholders as a basis.

From the perspective of selecting suppliers, it has made an undertaking to an impartial and objectivesupplier, contractor and external collaborator selection process.

From the standpoint of behavior, Gamesa undertakes to establish the appropriate channels to gatherinformation about the ethical behavior of its suppliers, contractors and collaborators and undertakes toadopt the necessary measures should such behavior contravene the values and principles enshrined in theCode of Conduct.

Flexible and competitive supply base

Gamesa is continuing to strengthen its supply chain in the regions where it has a presence by attempting toincrease the amount of local supplies in all of them. In 2016, the company faced a series of challenges jointlywith its suppliers, which involved the latter’s technological development and the competitiveness:

Achieving a rapid response to market needs and starting up new turbine configurations where theyare demanded. This has posed a serious challenge for suppliers and led to the progressive increase inthe capacity in terms of technology, flexibility and competitiveness. A good example of this is thedevelopment of the G114 2.5 supply chain in China.

Rapid industrialization of two prototypes of way almost simultaneously: the G126 2.5 and the G1323.3.

15See collective agreement: http://www.boe.es/boe/dias/2016/08/04/pdfs/BOE-A-2016-7547.pdf

16See the policy at: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-corporativo/politicas-corporativas/politicas-

resp-social/politica-de-contratacion-y-relacion-con-proveedores-contratistas-y-colaboradores.pdf



Development of supply chains in India for the G114 Class S.

Continuous improvement of the G97 and G114 mainstream products through the Model Year concept(grouping together the implementation of product changes result in provide cost improvements oncea year to make our assembly plants more efficient).

Specific cost reduction plans for BOP, construction and logistics. In the case of the logistics, theimprovement in competitiveness has led us to negotiate freight charges directly with ship owners andto design tools that can be reassembled for towers shipments made by sea.

Promoting supply chain localization chain in the regions where Gamesa manufactures or assemblesparks whilst always complying with the company’s quality standards like, for instance, in Egypt,Turkey, Chile and Uruguay.

Driving forward suppliers’ overall development by giving them the chance of not only supplying the region towhich they belong but also other regions on the basis of their performance. The Gamesa supply base in 2016was comprised of 10,961 suppliers around the world serving a procurement volume of over €3.721 billion.

Table 21.- Supply base: Number of suppliers

2016 2015 2014 2013 2012

EMEA 5,263 5,001 5,103 4,959 5,526

Direct suppliers17 1,085 944 719 590 739

Indirect suppliers 4,178 4,057 4,384 4,369 4,787

USA 778 737 824 847 1,187Direct suppliers 119 118 138 79 132Indirect suppliers 659 619 686 768 1,055

APAC 816 735 712 624 886Direct suppliers 300 280 302 209 254Indirect suppliers 516 455 410 415 632

INDIA 2,161 1,674 1,478 1,231 1,147Direct suppliers 311 242 198 105 114Indirect suppliers 1,850 1,432 1,280 1,126 1,033

BRAZIL 1,302 1,274 1,032 639 508Direct suppliers 152 136 96 37 29Indirect suppliers 1,150 1,138 936 602 479

LATAM18

641 553 (1) (1) (1)

Direct suppliers 52 27 (1) (1) (1)

Indirect suppliers 589 526 (1) (1) (1)

Total suppliers in the supply base 10,961 9,528 8,862 8,300 9,254

As far as procurement volumes are concerned, three-fourths of the company’s procurement volume in 2016was concentrated in India (25%), Spain (24%), China (17%), the United States (10%) and Brazil (8%).

Thus, the company helps to generate wealth in the areas where it has industrial activities, in addition toattaining a stable local economy.

17Note: Directly associated materials and procurements or which form part of the wind turbine.

18Note: Mexico and rest of LATAM were included under the Europe & Rest of the World geographic unit until 2015.



Table 22.- Procurement volume by supplier’s country of origin

2016 2015 2014 2013 2012

Spain 25.14 % 28.56% 33.59% 41.49% 36.74%India 23.60% 17.83% 14.98% 9.82% 7.60%China 17.33% 16.72% 12.77% 8.71% 10.24%United States 8.68% 7.55% 7.10% 6.33% 21.52%Brazil 8.07% 12.69% 11.01% 9.03% 4.12%Mexico 3.99% 3.24% 4.76% 8.06% 7.35%Germany 2.61% 2.81% 2.80% 2.41% 1.74%United Kingdom 1.14% 0.53% 0.94% 1.23% 1.15%Uruguay 1.20% - - - -Italy 1.04% 1.38% 1.58% 1.78% 1.22%France 0.82% 0.88% 1.30% 2.31% 1.34%South Korea 0.71% - - - -Egypt 0.65% - - - -Denmark 0.59% 0.58% - - -

Procurement volume (€ million) 3,721 3,026 2,242 1,978 2,359

Procurement volume

Fig.11.- Overall procurement volume (evolution) Fig 12.- Overall procurement volume 2016 (by geographic areas)

Fig 13.- Distribution of supplies 2016 (by geographicareas and typology)

Fig 14.- Distribution of supplies 2016 (by nature of supply)

2,359

1,978

2,242

3,026

3,721

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2012 2013 2014 2015 2016

Procurement Volume (€ million)

APAC10%

BRAZIL10%

EMEA32%

INDIA30%

LATAM9%

USA9%

0 500 1,000 1,500

LATAM

BRAZIL

INDIA

APAC

USA

EMEA

€ million

EXW PROJECTS SERVICES CAPEX & OTHER

0 500 1,000

NACELLES

BLADES

TOWERS

GEARBOX

CABINETS

GENERATORS

CONSTRUCTION

BOP

LOGISTICS

SPARE-PARTS

INDIRECT SERVICES

CAPEX & OTHER

€ million



Table 23.- Direct procurement supply base (by business areas)

2016 2015 2014 2013 2012

No. % No. % No. % No. % No. %

DIRECT PROCUREMENT

Nacelles 399 4.83% 373 21.6% 391 25% 432 30% 447 31%

Blades 119 1.44% 129 7.47% 146 9% 148 10% 190 13%

Towers 166 4.01% 81 4.69% 72 5% 65 5% 86 6%

Services 1,241 15.02% 579 33.53% 583 37% 523 37% 474 33%

Gearbox 331 33.13% 345 19.98% 209 13% 180 13% 184 13%

Converters 178 2.01% 150 8.69% 83 5% 78 5% 77 5%

Generators 273 3.30% 70 4.05% 79 5% - - - -

INDIRECT PROCUREMENT

Construction 1,393 16.86% 1,174 24.37% - - - - - -

BOP 557 6.74% 439 9.11% - - - - - -

Logistics 867 10.50% 382 7.93% - - - - - -

Services 2,737 33.13% - - - - - - -

Capex and Overheads 1,825 17.54% 2,467 51.21% - - - - - -

Rest of indirect procurement 320 3.08% 355 7.37% - - - - - -

Local supplier development and wealth creation

Gamesa assigns its own materials and quality development engineers to suppliers’ facilities in order toensure their technological development and competitiveness.

This is the case in India, for instance, where a hydraulic component manufacturer (Hydratech), an infusionresin supplier (Aditya Birla) and large cast parts manufacturers like Synergy Greem, Classic Tools and SE Forgehave been developed.

In China, suppliers of blades (Aeolon), blade bearings (TMB), large cast parts (Danian Heavy and Dahua),pitch cylinders (Hydratech) and tower interiors (Alluwind) have been developed.

In Brazil, Gamesa has screened suppliers of metal parts (Jumbo and Painco), blade bearings (Kaydon), andnuts and bolts (Friedberg and Metalbrax).

In EMEA, suppliers of main axel bearings (ZKL), cast axels (Lucchini) and yaw engines (Emod) have beendeveloped.

In Mexico, Gamesa has expanded the number of blade manufacturing lines at the TPI plant.

Local capacity is boosted through the supply chain’s localization in the different regions. Thus, the companyhas managed to globalize its supply profile, which includes: global suppliers with a local presence, newlocally-based suppliers and globalized current suppliers. This is viewed as the supplier accompanying Gamesaon the group’s path to globalization.

Good proof of this is that the degree of localization (local procurement) achieved in 2016 amounted to 91%in China, 62% in India and 72% in Brazil.

Table 24.- Degree of procurement localization

2016 2015 2014 2013 2012

APAC -90% (G97)

91% (G114)

89% (G8X)89% (G97)

90% (G114)

88%(G8X)88% (G97)

-94% (G97)

98% (G8X)99% (G97)

USA (United States + Asia) - - - - 79% (G97)INDIA 62% (G97)

62% (G114)63% (G97)

-61% (G97)

-74% (G97)

-74% (G97)

-BRAZIL 72% (G97) 52% (G97) 29% (G97) 49% (G97) 52% (G8X)LATAM 69% (G97) - - - -



In order to provide a response to the Business Plan, the Procurement Department has also been workingjointly with local suppliers and the Technology and Quality Department on reducing the cost of energy bydesigning turbine models which optimize AEP, like the ad-hoc turbine designs for specific markets. Goodexamples of this are the G114 CS 106 m turbine for India, a project geared at increasing AEP through the MaxPower concept (5% increase in rated power) in order to improve turbines’ competitiveness. It has alsocontinued with the work on redesigning components under the Costwise Product Evolution and the CriticalComponent Development programs. Transformers in Europe have likewise been adapted to the Eco-Directive.

In 2016, 379 projects on different product platforms to generate alternative suppliers were successfullyconcluded in China (94), India (140), EMEA (86) and Brazil (59).

Table 25.- Alternative supplier generation projects

G10x G114 G8x G9x 2016 2015 2014 2013 2012

EMEA 5 68 8 5 86 100 116 61 85USA - - - - - - - 3 22APAC 73 21 94 94 92 95 61INDIA 110 30 140 93 65 88 79BRAZIL 52 7 59 57 34 19 20LATAM - - - - - - - - -

Total projects 5 303 8 63 379 344 307 266 267

It is therefore evident that Gamesa’s activity produces an indirect economic impact generated by wealthcreation in the economy through changes in the productivity of companies, industries and the local economy.At the same time, it improves qualifications and know-how in the professional community and creates jobsdependent on the supply and distribution chains.

The company has continued to make progress in its strategy of combining internal manufacturing withexternal key component supplies, which maximizes operational flexibility and optimizes investment. Theoutsourcing of blade manufacturing through the development of the supplier Aeolon in China and theincrease in the number of blade manufacturing lines at the TPI plant in Mexico have been particularlyimportant.

Ongoing contact with the partners and suppliers

As an essential element to ensure the implementation of these actions, the company maintains ongoingdialog mechanisms with the supply base, including:

Supplier events held in Brazil, China, Spain and India in 2016.

o China (Tianjin), March 2016, approximately 104 suppliers

o Spain (Bilbao), November 2016, approximately 93 suppliers

o Brazil (Sao Paulo), February 2016, approximately 83 suppliers

o India (Chennai), April 2016, approximately 100 suppliers

The aim of these events is to share the company’s challenges concerning new products, new marketrequirements and increases in demand and consequently capacity. Said events have a global and localfocus (for the EMEA region in the case of Pamplona and for APAC in the case of Tianjin) in order toeffectively convey the need to contribute to the Business Plan’s attainment jointly with Gamesa.

Supplier portal aimed at interchanging technical information on products, quality documents anddelivery management.

Gamesa website, which contains:

o The new general procurement terms and conditions (GPC), which include the SuppliersCode of Conduct

o Suppliers’ quality manual.

Gamesa assesses all suppliers on a monthly basis via the Supplier Quality Assurance Department



through indicators (lack of quality costs, deviations, 8Ds, H&S and the environment) in order tosupervise the quality levels of components or materials. In addition, a quarterly grading has been putinto place which covers the most significant part of the supply chain. The SQA Department draws up alist of suppliers which will undergo supervision based on several criteria like the size and importanceof the components they supply or their turnover with Gamesa.

Responsible development of the supply chain

Within the scope of its responsibility, the Procurement Department has a supplier management model whichseeks to create long-term value through the management of the opportunities and risks resulting fromrelevant economic, environmental and social values.

In order to fulfill the guidelines set out in the Corporate Social Responsibility Master Plan 2015-2017, thecompany’s Procurement and Supplies Area continued with the deployment of the Achilles-Repro platform,an administrative supplier control tool which covers areas like suppliers’ i) corporate social responsibility; ii)quality management; iii) health and safety management; iv) environmental management; v) technicalresources; and vi) human resources.

Data is obtained and background situations are assessed through said supplier screening and assessmentplatform, which also includes auditing services. At the 2016 year-end, 1,031 the Gamesa suppliers wereregistered in the Achilles-Repro system, whose cumulative invoicing amounted A almost €390 million.

Fig 15.- Procurement: CSR assessment on suppliers 2016 Fig 16.- Procurement: Supplier management systems

Quality of suppliers

Supplier management at Gamesa is based on the Gamesa Suppliers Quality Manual (GSQM). Its aim is tospecify and explain the procedures and requirements which govern cooperation between Gamesa and itssuppliers in order to ensure outstanding quality for our customers at all levels in the supply chain. This QualityManual sets out three basic processes in the Gamesa-supplier relationship which ensure the quality of supply:

1. Supplier grading process: which describes the supplier’s grade for it to be assigned with materials andcomponents. When suppliers are selected and assessed, Gamesa conducts several audits to confirm theircapacity beyond their level of certification. Gamesa approved 50 new suppliers as part of this process in 2016(66 in 2015). This includes, among other matters, an assessment of the social and environmental criteria setout in the internal procedure.

2. Production parts approval process (PPAP): this process allows the supplier to i) ensure that the process iswell defined and fulfills Gamesa specifications; ii) ensure the process’s stability which will allow qualityproducts to be supplied on an ongoing basis throughout the product’s useful life; and iii) provide objectiveproof that demonstrates the process’s capacity and robustness.

3. Series life management process: which allows i) changes in processes or products to come about; ii)specifications to be modified by Gamesa; and iii) deviations and lack of quality costs to be managed. Morespecifically, the Supplier Quality Assurance (SQA) Department conducts ongoing monitoring on lack of qualitycosts, which allows all the incidents involving Gamesa’s suppliers to be known, filtered and managed.

A quarterly assessment of the quality management system of the most important suppliers (TOP 100) isconducted by Gamesa’s Supplier Quality Assurance Department as part of the series life management process.An assessment is also made of their results, the care they take of the environment and whether theiroccupational health and safety system has been duly certified. This process was applied to 174 existingsuppliers in 2016 (111 in 2015), which were graded A, B, C or D based on their performance.

0% 20% 40% 60% 80%

A+

A

B

0% 50% 100%

Quality Certification

EnvironmentalCertification

Health and SafetyCertification

CSR Certification



Fig 17.- Quality: Performance assessment of the most important suppliers 2016

Table 26.- Responsible measures on the supply chain

Preventive measures Incentivizing measures

Actions on Gamesa’sbehavior

Gamesa Supplier Relationship and Procurement Policy(updated in September 2015)

Gamesa Code of Conduct

Overall CSR Policy

ISO 9001 certified procurement procedures

Corporate defense policy and program

Annual improvement targets forprocurement teams

Supplier screening, classificationand control system

Actions on suppliers’behavior

Gamesa Supplier Relationship and Procurement Policy(updated in September 2015)

Gamesa Suppliers Code of Conduct (November 2014)

Supplier screening and grading system

External supplier auditing

General Procurement Terms and Conditions for goods andservices

Supplier quality assurance system.

Supplier screening, classificationand control system

Suppliers’ development projects

Supplier improvement andcommunication actions

Contracting specializedemployment agencies

The Gamesa Supplier, Contractor and Collaborator Contracting and Relationship Policy19

sets out theprinciples upon which Grupo Gamesa intends to base an overall framework to control and manage the risksresulting from procurement and works and services contracting activities by taking the principle of creatingvalue for the different stakeholders as a basis.

Gamesa’s Code of Conduct applies to Gamesa’s suppliers, contractors and collaborators20 and sets out rulesto ensure working conditions in the company’s supply chain are safe, that workers are treated decently andwith respect and that business transactions are ethically, socially and environmentally responsible. This codeis independent and appropriately updated to reflects Gamesa’s standards and operations with suppliers,contractors and collaborators.

The supplier screening, classification and control system, currently in the implementation stage, analyzes,classifies and assesses key suppliers in so far as they can negatively or significantly affect the attainment ofthe company’s strategic goals in the event of a breach or defective compliance. The system gives priority tosuppliers equipped with advanced management systems certified by a third-party, particularly onenvironmental, quality, occupational health and safety and corporate social responsibility action matters.

The supplier auditing systems, which is currently in the implementation stage and reflected in the CSRMaster Plan 2015-2017, is an effective tool to assess the performance of key suppliers in relation to theexpectations laid down by the policies and codes which apply to the supplier in question, while at the sameensuring it carries on with the improvement process. The cumulative number of complete audits conductedby Gamesa on suppliers and carried out through Repro-Achilles service amounted to 132 at the 2016year-end.

19See the policy at: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-corporativo/politicas-corporativas/politicas-

resp-social/politica-de-contratacion-y-relacion-con-proveedores-contratistas-y-colaboradores.pdf20

See: http://www.gamesacorp.com/recursos/doc/rsc/compromisos/proveedores/codigo-de-conducta-de-proveedores-2015-esp.pdf

Brazil

India

USA

EMEA

A

B

C

D

Electrics

Towers

Blades

Components

Composites

Processed steel

A

B

C

D



In addition to contractual elements in accordance with the prevailing legislation in the countries involved in atransaction, supply contracts include clauses on social responsibility issues (through the generalprocurement terms and conditions and or supply agreements), which are reflected in the Supplier Code ofConduct that the supplier has to accept when entering into supply contracts.

Gamesa’s general procurement terms and conditions21

explicitly include provisions on the respect forhuman rights and labor practices, as well as an evident stance against fraud and corruption. Gamesa is nowworking to ensure they are fully implemented across its entire supply chain.

The supplier quality assurance system (SQA): Gamesa’s SQA engineers audit quality regularly to check thatthe terms and conditions agreed to in the PPAP are still being implemented. These audits can be conductedwithin of 24 hours from the date Gamesa’s notice is received. The supplier has to cooperate in said auditsand allow the SQA engineer access to all areas involved in the component or material’s production. Gamesamay be accompanied in this kind of audits by of its customers.

It expected that both Gamesa and its suppliers will improve continuously in quality and the cost of theirproducts in order to be competitive. We therefore expect our suppliers to implement continuousimprovement processes and to be proactive when putting forward process and product improvements. Anyimprovements in processes that may be made by our suppliers will be valued in a positive light.

G4-13 Significant changes during the year

Changes in the supply chain: No significant changes came about in the supply chain of Gamesa CorporaciónTecnológica, S.A. during the year.

Changes in activities and/or operations: No significant changes came about in the activities and/oroperations of Gamesa Corporación Tecnológica, S.A. in 2016.

Changes in the share capital structure: No significant changes came about in the company’s share capital in2016. For further information, see indicator G-7 on share capital (p. 26).

21See: http://www.gamesacorp.com/recursos/doc/rsc/compromisos/proveedores/espana-condiciones-de-compra-version-gpc-001-

201503.pdf



Commitments to external initiatives

G4-14 Precautionary principle

Gamesa has incorporated the precautionary principle with regard to environmental protection in accordancewith the provisions of Article 15 of the Rio Principles. This principle has been widely accepted in laws andregulations aimed at protecting the environment.

The Gamesa Code of Conduct includes health and safety and the environment among its fundamentalprinciples and sets forth that Gamesa is fully committed to continuous improvement and collaboration toachieve sustainable development by developing and applying best practices aimed at environmentalprotection from the standpoint of prevention and by providing information and training on this culture.

Conservation of the environment is ensured through the approval of the appropriate environmental policy(integrated into the health and safety, quality, environmental and energy efficiency policy) and theimplementation of an environmental management system. It likewise requires that the people thus affectedmust know and assume said policy in the area where they operate and always act in accordance with thecriteria of respect and sustainability inspired by it, adopt environmental best practice habits and behavior,and contribute positively and effectively to achieving the objectives which have been set. They must makeevery effort to minimize the environmental impact arising from their activities and the facilities, equipmentand work resources placed at their disposal, endeavoring to make efficient use thereof.

G4-15 Externally developed principles or initiatives which the organization subscribes or endorses

Gamesa fully assumes voluntary commitments in the areas of sustainability, climate change and the defenseof fundamental human rights and freedoms. The most significant initiatives worth highlighting include:

Table 27.- External initiatives which the company subscribes

United NationsGlobal Compact

(Global Compact)22

Voluntary. Since 2005. Commitment and support to thepromotion of the ten principles of labor rights, human rights,environmental protection and the fight against corruption. Thecompany publishes a Communication on Progress (COP)annually, which reviews compliance with such principles. Thisdocument is made publicly available on the Spanish UnitedNations Global Compact Association’s website.

Global Reporting

Initiative (GRI)23

Voluntary. Since 2006. A non-governmental organization whosepurpose is to create a way of exchanging reliable transparentsustainability reporting by developing a common applicationframework for all types of organizations.

Caring for Climate:The businessleadership

platform24

Voluntary. Since 2007. A United Nations Global Compactinitiative which encourages the involvement of companies andgovernments in taking measures against climate change. Thecorporation has remained faithful to its commitments toincrease energy efficiency, reduce GHG emissions andcollaborate with other public and private institutions in apositive way.

22See link: https://www.unglobalcompact.org/what-is-gc/participants/4098-Gamesa-Corporacion-Tecnologica-S-A-#company-information

23See link: https://www.globalreporting.org/Pages/default.aspx

24See link: http://caringforclimate.org/



Carbon DisclosureProject (CDP)

Voluntary. Since 2008. Public disclosure of the informationprovided to investors and the supply chain. The CDP compilesinformation on the risks and opportunities which have beenidentified in connection with climate change, emission reductionplans and the transparency of corporate actions to mitigateclimate change.

Endorsement of theLuxembourg

Declaration25

Voluntary. Gamesa aligned itself with the European Network forWorkplace Health Promotion (ENWHP), whose aim is “Healthypeople in healthy companies” in 2014. In order to make thiscommitment visible, Gamesa endorsed the LuxembourgDeclaration on Workplace Health Promotion, which contains thebasic contents of the ENWHP, and has also joined the Networkof Healthy Companies promoted by Spain’s National Institute forOccupational Health and Safety.

University ofCambridge Institutefor SustainabilityLeadership (CISL).

Voluntary. Gamesa has successively signed the Carbon Price(2012), Cancun (2010), Copenhagen (2009) and Poznan (2008)Communiqués on Climate Change within the framework theUnited Nations Framework Convention on Climate Change(UNFCCC).Furthermore, in 2015, Gamesa reaffirmed its commitment to asecure and stable climate in which one the rise in temperature islimited to less than 2 degrees centigrade.

Endorsement of the Paris Pledge for Action26

means wewelcome the adoption of a new universal agreement at the COP21 in Paris and give it our support to ensure the aspirations setforth in the agreement are attained and exceeded.

Endorsement ofthe Diversity

Charter27

Voluntary. In 2015, Gamesa endorsed the Diversity Charterpromoted by the Diversity Foundation and driven forward by theEuropean Commission and the Spanish Ministry of Equality withthe undertaking to observe equal opportunity andanti-discrimination standards.

Companies for aGender-Violence-

Free Society28

Voluntary. Gamesa joined the Companies for a Gender Violence-Free Society network in 2015 through a collaboration agreementwith the Spanish Ministry of Health, Social Affairs and Equality tofoster awareness raising about gender violence and its victims’insertion into the labor force.

AdvancedManagementSystem

Voluntary. Gamesa endorsed the advanced management systemin 2015 and was granted an Advanced Management Diploma byEuskalit Foundation, which recognizes the undertaking andadvances made by Gamesa in the area of advancedmanagement, a term the foundation defines as the search forbetter results along five axes: strategy, customers, people,society and innovation.Gamesa was granted a Golden A in Advanced Management bythe Basque Government in 2016, an award endorsed by theFoundation for Quality Management (EFQM).

25See link:http://www.insht.es/PromocionSalud/Contenidos/Promocion%20Salud%20Trabajo/Documentos%20ENWHP/Documentos%20estrategicos/Ficheros/22_1%20Declaracion_%20Luxemburgo.pdf

26See link: http://www.parispledgeforaction.org/wp-content/uploads/2015/12/Paris-Pledge-for-Action-Spanish.pdf

27See link:http://www.insht.es/PromocionSalud/Contenidos/Promocion%20Salud%20Trabajo/Documentos%20ENWHP/Documentos%20estrategicos/Ficheros/22_1%20Declaracion_%20Luxemburgo.pdf

28See link: http://www.msssi.gob.es/gabinete/notasPrensa.do?id=3723



G4-16 Membership in main associations

The company actively participates in both industry-specific and business associations and organizations ineach significant place where it operates. Gamesa was an active member of 23 organizations and associationsin Spain and 29 associations in the rest of world in 2016, which amounted to a total expenditure of €1.5million in membership fees.

Table 28.- Main Spanish associations of which Gamesa is a member (2016)

ASOCIACIÓN NAVARRA EMPRESARIOS METAL (ANEM)

ASOCIACIÓN EMPRESARIAL EÓLICA (AEE)

ASOCIACIÓN PROGRESO DE LA DIRECCIÓN (APD)

BASQUE ECODESIGN CENTER – BEdC

CÁMARA DE COMERCIO BRASIL-ESPAÑA

CLÚSTER DE ENERGÍA

CONFEDERACIÓN EMPRESARIAL DE BIZKAIA (CEBEK)

EUSKALIT FUNDACIÓN VASCA PARA LA CALIDAD

FUNDACIÓN EMPRESA UNIVERSIDAD DE NAVARRA

FUNDACIÓN EUSKOIKER

FUNDACIÓN NAVARRA PARA LA EXCELENCIA

FUNDACIÓN UNIVERSIDAD EMPRESA

IZAITE, ASCIACIÓN DE EMPRESAS VASCAS POR LASOSTENIBILIDAD

NUEVA ECONOMIA FORUM

RED PACTO MUNDIAL ESPAÑA

Table 29.- Main international associations of which Gamesa is a member (2016)

AMERICAN WIND ENERGY ASSOCIATION (AWEA)

ASOCIACIÓN MEXICANA DE ENERGÍA EÓLICA (AMDEE)

ASOCIACIÓN URUGUAYA DE ENERGÍA EÓLICA (AUEE)

ASSOCIAÇÃO BRASILEIRA DE ENERGIA EÓLICA

ASSOCIAZIONE NAZIONALE ENERGIA DEL VENTO

BUNDESVERBAND WIND ENERGIE (BWE)

CÁMARA NACIONAL DE COMERCIO

CANADIAN WIND ENERGY ASSOCIATION (CANWEA)

CLEAN ENERGY COUNCIL AUSTRALIA (CEC)

CORPORATE ECO-FORUM

CONFEDERATION OF INDIAN INDUSTRY

SPANISH CHAMBER OF COMMERCE CHINA

EUROPEAN UNION CHAMBER OF COMMERCE IN CHINA

EUROPEAN WIND ENERGY ASSOCIATION (EWEA)

GLOBAL REPORTING INITIATIVE (GRI)

INDIAN WIND ENERGY ASSOCIATION (INWEA)

INDIAN WIND TURBINE MANUFACTURERS ASSOCIATION

MADRAS MANAGEMENT

NEW ZEALAND WIND ENERGY ASSOCIATION (NZWEA)

RENEWABLE UK ASSOCIATION, LTD.

ROMANIAN WIND ENERGY ASSOCIATION (RWEA)

RUSSIAN ASSOCIATION OF WIND POWER INDUSTRY(RAWI)

SCOTTISH RENEWABLES

STY – SUOMEN TUULIVOIMA YHDISTYSRY - FINNISH WINDPOWER

SVENSK VINDENERGI EKONOMISK FÖRENIN

Table 30.- Association membership and expenditure (€)

2016 2015 2014 2013 2012

Number of Spanish associations 23 25 31 22 23

Number of international associations 29 27 33 26 26Memberships costs in Spain 368,060 300,128 306,632 245,207 625,608International membership costs 1,140,548 638,813 515,208 511,390 656,966

CORPORATE RESPONSIBILITY REPORT 2016 | PART I. GENERAL DISCLOSURESSection I.03 – MATERIAL ASPECTS AND BOUNDARIES


I.03.- MATERIAL ASPECTS AND BOUNDARIES

G4-17 Entities included in the organization’s consolidated financial statements and in the boundary of this report

Gamesa, which is present in more than fifty countries, has followed the GRI guidelines to define this report’sboundary, taking into account the entities in which it has capacity to exercise control, those in which it has asignificant influence and the group’s relevant activities from the economic, environmental and socialstandpoints.For the purpose of this report:

The Spanish company Gamesa Corporación Tecnológica, S.A., Grupo Gamesa’s parent company, isreferred to as “Gamesa” or “the company”.

The set of subsidiaries over which Gamesa has the capacity to exercise control or to jointly control isreferred to as “Grupo Gamesa” or “the group”.

The set of companies in which Gamesa holds an interest, but without having capacity to exercisecontrol, are referred to as “investee companies”.

Boundary

The consolidated annual accounts for the year ending at December 31, 2016 set out the companies in whichGamesa holds a direct or indirect interest.

Financial consolidation

The quantitative information available on all its companies’ economic performance corresponds to Gamesaand its subsidiaries and investee companies and refers to all of the company’s activities. The economicinformation included in this report for 2016 comes from the annual accounts, the annual management reportand the audit report for 2016.

Social and environmental consolidation

The principles and the corporate policies which Grupo Gamesa adopts and publicly discloses, along with itsstrategies, apply to all the activities of the group’s subsidiaries in all of the countries where they operate.Information on the management approach, targets and performance are included in this report. Thequantitative information on the environmental and social dimensions included in the tables and charts of thisreport considers the activities Gamesa performs in the countries where the company’s presence is mostrelevant in terms of sustainability.

Limitations on the information

The Corporate Responsibility Report for 2016 covers Gamesa and its subsidiaries which make up the group.This means that this document includes all the corporate responsibility information of Grupo Gamesa and itscompanies. There are therefore no other documents drawn up by the subsidiaries which complete thisbalance.

This report therefore does not include any qualitative or quantitative information on joint ventures orassociated companies in which Gamesa does not hold a majority interest, or information on subcontractedactivities or on leased facilities in order to ensure clear year-on-year comparability.

Gamesa included the company 9REN Spain, S.L. into the group on December 30, 2016. This inclusion is fullyeffective for the purpose of calculating the economic indicators (G4-EC series of indicators). The number of9REN’s employees (264 people) has been included for the purpose of consolidating the workforce (indicatorsG4-9, G4-10 and G4-LA12) as well as for the rates on the number of employees.

There are therefore no significant changes from previous reporting periods in the scope, boundary ormeasurement methods applied in the report. Hence, Gamesa considers that this report presents areasonable and balanced view of the group’s economic, environmental and social performance. Should therebe any limitations on the information reflected in this report due to not completely entering quantitativedata into the management systems, they are considered to have little influence on the overall data on thegroup and, in Gamesa’s judgment, do not affect in any relevant way the assessment the reader may makeabout the company’s performance.



G4-18 Definition of the contents and boundary of the report and the application of GRI principles

In order to draw up this report, Gamesa has adopted the GRI Sustainability Reporting Guidelines (version G4).As the GRI indicates, these guidelines are the result of a process in which different stakeholders around theworld take part, including representatives from the business world, the trade unions, civil society, the financialmarkets, auditors and specialists in various business disciplines, regulators and government agencies indifferent countries.

For its part, Gamesa, as a multinational enterprise having a presence in countries in several continents withdifferent economic and social models, has also been developing systems and processes to obtain thenecessary information to meet the GRI’s requirements and recommendations, as well as those from otherentities which are concerned with corporate responsibility issues, such as the Dow Jones Sustainability Indices,the FTSE4Good, the Ethibel Sustainability Index and the Carbon Disclosure Project.

Material aspects identified by the Global Reporting Initiative (GRI)

The aspects identified in the GRI Guidelines result from an extensive process of stakeholder engagement andthey comply with the requirements of sufficient materiality to be included in corporate responsibility reports.

Gamesa’s corporate responsibility report for 2016 includes reporting on aspects identified by the GRIGuidelines and provides continuity with previous years’ reporting. These aspects are specifically identified inAppendix I of this report.

Material aspects identified internally

In order to analyze the evolution of the internal material aspects identified in preceding years, Gamesaupdated its materiality analysis in 2016. This has allowed the company to deepen its understanding of thestakeholders’ needs and expectations to thus identify any aspects which are key to both Gamesa and thedifferent stakeholders.

The materiality analysis has been divided in three stages as follows:

The preliminary analysis aims to obtain a list of aspects to be analyzed, taking into account internal policiesand procedures as well as knowledge about the industry in which Gamesa operates. As a result of thisstage, 34 topics were identified which were grouped under nine thematic areas.

The aim of the internal relevance analysis is to determine the relevance for Gamesa of the aspectsidentified in the previous stage. To achieve this, the aspects were prioritized according to their importancein the company’s strategy.

The aim of the external relevance analysis is to determine the relevance for stakeholders of the aspectsidentified in the previous stage. In order to achieve this, CSR topics on competitors, industry opinionmakers, CSR opinion makers and the mass media were thoroughly analyzed and prioritized.

MaterialityAnalysis

21

3



Fig. 18.- List of aspects analyzed

G4-19 Material aspects identified

Once the external and internal relevance of each of the aspects identified was analyzed, the results obtainedwere cross-referenced to obtain the following materiality matrix:

Fig 19.- Gamesa materiality analysis 2016



24 GHG emissions and strategy inthe fight against climate change

7 Regulatory compliance 21 Procurement practices andsupplier assessment based onCSR criteria

15 Health and safety 8 Economic management andperformance

32 Customer satisfaction

2 Risk and opportunitiesmanagement (business, risks,CSR, etc.)

3 Corporate governance 10 Renewable energy environment(project portfolio, marketforecasts)

1 Business model and strategy 6 Ethics, integrity and the fightagainst corruption

5 Investor relations

17 R&D and innovation programsand investment

20 Human rights

The aspects thus identified have been grouped into three groups depending on their relevance forstakeholders and Gamesa. The material aspects include any aspects which are highly relevant for bothstakeholders and Gamesa. These aspects are currently a priority in the company’s business strategy.

The future material aspects include any which are highly relevant for stakeholders though not for Gamesa.These aspects, though not currently considered as material aspects, are those whose importance Gamesa isaware of and it consequently is equipped with the management tools that enable it to give a response to thestakeholders’ expectations.

Lastly, the aspects defined as non-material aspects are those which are of minor relevance for the companyand the stakeholders. They are, however, analyzed periodically to ensure the business strategy is in line withthe stakeholders’ needs and expectations.

G4-20G4-21

Boundary within the organizationBoundary outside the organization

Most relevanttopics

General topicsof special interest identified

Stakeholders whichconsider the aspect

material

Gamesa’s responsein the report

Climatechange

Policies and strategies to combat climate change

Inclusion of climate change in product design as anenvironmental element.

Historic CO2 emissions trend (direct and indirect).

Quantitative emission reduction targets.

Commitment to public initiatives to combat climate change.

Competitors CSR opinion makers Industry opinion

makers Mass media Sustainability indices Gamesa management

Section II.10“ENVIRONMENTALDIMENSION” (p. 93)

Healthand safety

Health and safety policies and programs.

Track record of accidents and near misses.

Health and safety measure to improve productivity and thequality of employment

Culture of safety across the company

Development of effective management systems.


makers Sustainability indices Gamesa management

Management approach tohealth and safety (p. 121 andthe following)

Risk andopportunitiesmanagement

Risk identification, assessment and management systemsimplemented and business and CSR opportunities.

Risk mitigation systems.

Risk control and management policy.

Competitors CSR opinion makers Sustainability indices Gamesa management

Indicator G4-2

Businessmodel andstrategy

Integration of CSR aspects in the company’s strategy.

CSR Policy and Master Plan.

Organization’s structure.

Competitors CSR opinion makers Mass media Sustainability indices Gamesa management

Section I.02.“ORGANIZATIONAL PROFILE”(21)

R&D andinnovation

Innovation programs.

R&D and innovation. Innovation process.

Wind turbine models and features.


makers Mass media Sustainability indices Gamesa management

“Innovation” section (p. 87);“Wind Turbines” section inG4-4 (p. 21)



Most relevanttopics

General topicsof special interest identified

Stakeholders whichconsider the aspect

material

Gamesa’s responsein the report

Regulatorycompliance

Breaches of prevailing legislation.

Grievances, fines and penalties in CSR topics.


makers Sustainability indices Gamesa management

Indicators G4-EN34, G4-LA16, G4-HR12, G4-PR8, G4-EN29, G4-SO7, G4-PR2, G4-PR4, G4-PR7, G4-PR9, G4-SO8.

Economicmanagement

Management model; direct economic value generated anddistributed; profit, sales and growth expectations.

Significant indirect economic impacts; significant financial aidreceived.

Supplier management, policies, practices and proportion ofexpenditure on locally-based suppliers.

Competitors CSR opinion makers Mass media Gamesa management

Management approach toeconomic performance(p. 84 and the following)

Corporategovernance

Linkage between remuneration and performance.

Board remuneration in line with ESG targets.

Ensuring the independence of the Board’s structure.

CSR responsibilities within the Board.

Promotion of the diversity as regards gender, ethnicity,nationality and professional experience.

Competitors CSR opinion makers Mass media Sustainability indices Gamesa management

Indicators from G4-34 to G4-58

Ethics,integrity andthe fightagainstcorruption

Codes of conduct and compliance systems.

Policies against bribery and corruption.

Public commitments to business ethics.

Whistleblowing procedures and conflict of interest resolutionprocesses.

International ethics and integrity initiatives.


Section I.07.- ETHICS ANDINTEGRITY (75)

Human rights Formal policies on human rights issues in line with leadinginternational standards.

Promoting practices that respect human rights amongemployees.

Promoting human rights in areas where the company can exertinfluence, especially among partners and suppliers.


Section I.07 “Ethics andintegrity”, indicators G4-56;G4-57; G4-58; Managementapproach to “Human Rights”(p. 137)

Procurementpractices andsupplierassessmentbased on CSRcriteria

Policies on relationships with suppliers, which include basicprinciples of business ethics.

Policies and procedures on the ethical supply of componentsand materials in the supply chain.

Monitoring working conditions at suppliers and contractors.Audits and periodic assessments.

Contingency plans if violations of labor rights in the supply chainare identified.


Indicator G4-12

Customermanagement

Processes to measure customer satisfaction.

Characteristics of products and services.


Management approach to“Product and ServiceLabeling” (p.153); Customerprivacy (p. 156 ); Customers’health and safety (p. 152);G4-4; G4-PR5; G4-PR3

Renewableenergy sector

Situation of the competitive environment.

Project portfolio and market forecasts.

National targets and aid for the installation of wind power.

Price kWh.


makers Mass media Gamesa management

Indicator G4-2

Investorrelations

Investor relations policy.

Collaboration with shareholders and investors.

Transparent communication with investors.

Encouraging ongoing reporting to investors.

Competitors CSR opinion makers Mass media Gamesa management

Indicator G4-26 in the“Dialog with Investors andShareholders” section

As far as each of the material aspects’ coverage is concerned, Gamesa considers that all the aspects haveinternal and external coverage because, as the materiality matrix demonstrates, they have effects bothwithin the company as well as on the different stakeholders.



G4-22 Restatements of information provided in previous reports

Gamesa has not considered it necessary to restate any information from previous reports owing to corporaterestructurings. However, there could be minor deviations with respect to the quantitative data disclosed inseveral years and 2016 as a consequence of updates and adjustments.

As in every year, it is possible that the economic and financial figures set out in this report may notcorrespond to the original figures due to the rounding up or down of figures. In the event of any discrepancy,the information provided in the Consolidated Annual Accounts for the year ending at December 31, 2016shall prevail.

G4-23 Significant changes in the report’s scope and boundary

No changes deemed as significant came about in 2016 in the scope, boundary and assessment methods usedin the report. The possibility of comparing the group’s main figures with those of previous years is thereforemaintained.

CORPORATE RESPONSIBILITY REPORT 2016 | PART I. GENERAL DISCLOSURESSection I.04 – STAKEHOLDER ENGAGEMENT


I.04.- STAKEHOLDER ENGAGEMENT

G4-24 Stakeholders engaged by the organization

The company’s relationship with any groups affected by its activities (stakeholders) is maintained in a two-fold way. Such relationships involve: from the standpoint of social responsibility, responding to theirexpectations and needs and, from a reputation-related perspective, managing the perception thesestakeholders have of the company.

Seeing as these stakeholders are very numerous in a business group like Gamesa, they have been analyzed inaccordance with their relevance for the company’s activities and have been grouped together under thefollowing categories for practical purposes:

Fig 20.- Stakeholders

G4-25 Basis for the selection of stakeholders

The identification and selection of Gamesa’s stakeholders is carried out through internal processes ofreflection involving the management team and based on establishing relationships with key groups to meetboth their expectations and the company’s needs.

G4-26 Approach to stakeholder engagement, including frequency of engagement by type and by stakeholdergroup

Gamesa consolidates preferential communication channels with these groups in order to identify the mostrelevant topics and provide a reasonable response to their expectations, in as much as it is possible.

These channels have their own specific features as regards format, responsibilities, intensity of therelationship and frequency of use, ranging from permanently available means of engagement, like mailboxesand portals, to annual or multiannual means, such as surveys. They also include other non-periodic meanswhich, as a whole, configure a relationship which the company views as proximity to its stakeholders. Themost important means of engagement with these stakeholders are summed up in the following table:

CUSTOMERSPUBLIC ADMINISTRATIONS AND

REGULATORS

SUPPLIERS

SHAREHOLDERS, INVESTORS,ANALYSTS AND INDICES

EMPLOYEES MASS MEDIA

SOCIETY AND COMMUNITY(local communities, media, academia, NGOs, etc.)



Table 31.- Stakeholders: Most relevant means of engagement

Stakeholder Most relevant means of engagement Other means of engagement

Customers Direct contact with customers through the sales area andnetwork of key account managers, visits to customers,customer satisfaction polls (CSP), meetings with customers,product seminars with customers, certified courses andseminars on technical, wind energy and prevention issues.

Relationships through industryorganizations. Exclusive portalfor operations and maintenanceservice customers.Satisfaction surveys

Shareholders, investors,ESG analysts and indexes

Shareholders’ meeting, personal contact with shareholders,shareholder information office, results presentations, BusinessPlan presentations, investor relations department, visits tofinancial centers, talks with institutional investors.

Specific corporate website,telephone and e-mail aimed atthe financial community.

Public administrationsand regulators

Queries, formal procedures and meetings with differentadministrative agencies and public authorities.Participation in forums, workshops, events and collaborativeinitiatives with the community.

Participation in businessassociations and other socialorganizations.

Employees Trade union committees and social dialog, Gamesa intranet,specific e-mail accounts for employees, employment portal,Gamesa buying club, flexible compensation plan informationcenter, GMBO process, orientation and other activities, self-development resources center, Think Safe program.

Internal magazine (GamesaPlanet), suggestions box,Whistleblowing Channel, etc.

Suppliers Events with suppliers, suppliers’ portal and website containinggeneral procurement terms and conditions, suppliers’ qualitymanual, supplier screening and classification procedures.

Supplier surveys.Joint projects with suppliers.

Mass media Press releases, group and face-to-face meetings withjournalists, query mailbox on the website, social networkcommunication channels.

Corporate website.

Society and community Direct relationships with national, regional and local publicadministrations; participation in business associations andother chambers of commerce; relationships with a largenumber of social organizations. Social Initiative projects andrelationships with the local community.

Collaboration projects withsocial organizations;participation in forums,seminars and workshops; directrelationships withenvironmentaland social groups in thesurroundings of work centersand wind farms.

Same practical examples of the engagement channels are shown in the tables below:



Table 32.- Interaction with shareholders and the financial community

2016 2015 2014 2013 2012

General Shareholders’ Meeting: % share capital in attendance 59.24% 58.88% 49.22% 39.05% 32.09%General Shareholders’ Meeting: Monitoring 43 58 80 152 308No. of queries attended by Shareholder Information Office 363 294 291 477 560Institutions which analyze Gamesa’s boundary 29 30 24 22 22

Attendance at results presentations (No. of people)29 432 613 1,547 983 823

Shareholder services mailbox (queries attended) 237 125 82 100 400Investors and analysts’ mailbox (queries attended) 443 517 303 248 328

Table 33.- Interactions with employees

2016 2015 2014 2013 2012

Gamesa Club: Products and services offered 53 48 55 37 41Gamesa Club: No. of sessions 4,583 3,746 15,609 11,368 9,286Gamesa Club: Pages viewed n.a. n.a. n.a. n.a. 22,084Gamesa Club: Average time of visits 0’25” 0’31” 1’09” 1’18” 1’44”Gamesa Flex: No. of employees who acquire services 564 585 525 653 529Gamesa Flex: Queries attended 2,712 2,042 2,030 1,029 1,193Human resources mailbox: Communications andInternational Office (See note)

128 125 6 8 301

Employment portal: No. of job offers posted 608 107 121 47 -Employment portal: Applications received 7,484 1,501 1,486 1,053 -

Note: Considering only collective messages, not said mailboxes’ direct activity with employees.

Table 34.- Interaction with workers’ representatives

2016 2015 2014 2013 2012

Works councils 37 36 35 34 37Meetings with committees 307 234 278 212 147Downsizing plans: Negotiation meetings - 16 24 37 65Downsizing plans: Monitoring meetings - 16 24 26 31No. of trade union elections 5 15 6 6 -No. of collective agreements signed 8 - 4 2 -No. of meetings with the Psychosocial Risk Board 1 4 5 4 -No. of meetings with the Diversity and EqualityCommittee

5 3 5 8 2

Note: The data refers to Spain

Table 35.- Interactions with employees, media and general public

2016 2015 2014 2013 2012

Gamesa website: No. of sessions 1,136,695 888,243 795,904 1,084,099 1,421,560Gamesa website: Pages viewed 3,040,045 2,462,907 2,303,102 2,887,732 3,893,073Gamesa website: Average time of visits 2’13” 2’37” 2’52” 3’32” 4’01”Gamesa website: No. of news items posted 73 72 76 52 80Gamesa intranet: No. of sessions 1,303,576 751,462 718,433 124,359 142,954Gamesa intranet: Pages viewed / No. of sessions 2,657,976 1,612,985 1,526,410 419,101 509,947Gamesa intranet: Average time of visits 4’ 11” 4’ 23” 4’33” 4’24” 4’36”Gamesa intranet: No. of news items posted 174 152 147 97 118Gamesa Planet for employees: No. of editions 9 8 10 - -No. of press releases to media 73 72 76 52 80Social networks: Twitter followers 6,651 4,408 3,200 2,484 -Social networks: LinkedIn followers 86,336 61,978 41,635 27,401 -Social networks: No. of YouTube visits 34,091 18,912 - - -Social networks: Average time of visits 1’42” 1’53” - - -Disclosures to the CNMV 43 48 44 43 30

29Note: Includes attendance by telephone and webcast.



Fig 21.- Gamesa website in 2016 Fig 22.- Gamesa intranet in 2016

Meetings with journalists, press conferences and informative meetings with the mass media

Several informative meeting were held with the mass media in 2016, the following of which stand out:meetings held prior to the merger with Siemens wind power business to explain the operation, meeting withthe Gamesa Chairman after the Extraordinary General Shareholders’ Meeting, inauguration of the off-gridprototype in La Muela in the province of Aragon, celebration of the nacelle annual production record at theÁgreda plant in the province of Soria, meetings held during the Windenergy trade fair in Hamburg, meetingsheld with the Basque media on the Gamesa Dreamfooter children’s team participating in the Donosti Cupsoccer tournament and invitation to the Galician media to visit the blade factory at As Somozas due to itsexpansion.

Gamesa Planet

Five new issues of the internal corporate magazine Gamesa Planet were circulated by e-mail in 2016 to allthe company’s employees with an e-mail account. As the previous years, it was also sent in PDF format toGamesa plant managers in Spain, Brazil, India and China so it could be printed out and posted on theproduction centers’ bulletin boards. It was also projected on screens at several production centers in Spain.In addition to these issues, Gamesa Planet News Flashes containing a summary of the main figures obtainedwere sent by e-mail after each results presentation. The magazine’s five issues attracted 23,552 visits (vs.13,955 in 2015) and the visits averaged 2’07” (vs. 2’21”).

Suitability of the information for stakeholders

Gamesa is ranked 28th

among the companies listed on the General Madrid Stock Market Index (IGBM - ÍndiceGeneral de la Bolsa de Madrid) which best adapt information to communications with their stakeholdersregarding their activities, operations, expansion plans, risk management and corporate responsibility.This was confirmed in the Reporta 2016 report, which analyzes the best practices and communicationsguidelines of the 113 Spanish listed companies by taking in consideration the principles of transparency,suitability and accessibility.

Gamesa stood out for its general ranking in the 2016 edition of said report, being ranked 28 th with a totalscore of 67.7 points. The company was ranked above the average score for the selective IBEX 35 index in theareas of transparency and relevance, an indicator which measures the correspondence between what acompany reports and what effectively has material importance for the company itself and its stakeholders.

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Awards and recognition

According to The Sustainability Yearbook 2017, Gamesa is ranked among the world’s most sustainablecompanies. It is ranked among the best companies in the machinery and electrical equipment sector.

Gamesa shares were considered by Expansion as the best shares in 2015. The company’s shares pricerose by 109.3% in 2015, thereby reflecting its ability to move forward solidly with its Business Plan.

The G132-3.3 MW turbine was chosen as one of the year’s best 100 ideas by the magazine ActualidadEconómica. The publication has been recognizing the creativity and imagination of companies whichmanage to set trends and maintain their competitiveness in the market for 24 years.

Gamesa India was recognized for its EPC Solar capabilities by India Solar Week 2016. It was granted theRising Star - Solar PV EPC Company of the Year - Utility Scale Award.

Ramesh Kymal, Gamesa India’s CEO, was awarded at the 7th Renewable Energy Congress by the GlobalEnergy and Environment Foundation.

Gamesa was granted the Corporate Dragon Award to the best Spanish company in China. The awardrecognizes the contribution made by companies to business relationships, investment and businesscooperation between China and Spain.

According to the Economic Times, Gamesa India was the best infrastructure company. The Indianeconomic daily recognized the important contribution the company has made to the country’sindustrial growth.

Gamesa was a finalist at the Prevencionar Awards. These awards recognize the most outstandinginitiatives in occupational hazard prevention matters.

Gamesa’s Legal Department was granted the Gold Award by Iberian Lawyer.

Gamesa was granted a Golden A in Advanced Management by the Basque Government, an awardendorsed by the Foundation for Quality Management (EFQM).

Gamesa received the 47th Diplóos Award, a national occupational safety award which the Associationfor Occupational Accident Prevention (APA - Asociación para la Prevención de Accidentes Laborales)grants on a yearly basis.

Gamesa was granted a Silver Award at the SAP Quality Awards for the GATE project, an integratedhuman resources program that centralizes all talent management resources within a single tool with aglobal scope. The program services more than 6,000 users in 55 countries.

Gamesa was granted the Best Business Practices Award by El Confidencial. The company was awardedin the Transparency and Good Governance category.

Engagement with investors and shareholders

The company maintains numerous channels of engagement with shareholders, investors and analysts open,such as:

The Investor Relations Department made visits to financial centers like Madrid, London, Frankfurt,Boston, Geneva, Zurich, Paris, Amsterdam and New York in 2016.

In addition to results presentations (FY 2015, Q1 16, 1HY 16 and 9M 16), a conference was held in2016 to announce and present the advantages of the merger with Siemens Wind Power to themarket.

The company was present at nine conferences aimed at institutional investors in London and Madrid. Institutional Investors and Analysts Mailbox: 443 queries.

Ongoing contact with 32 firms of analysts during the year. Several firms ceased coverage in 2016 andothers restricted it due to the merger. At total of 29 firms were providing coverage at December 31,of which two had temporarily restricted coverage.



G4-27 Key topics and concerns that have been raised through stakeholder engagement

The process of managing the means of engagement described in section G4-26 above means that Gamesaanalyzes and assesses the information it receives and identifies the topics which concern the differentstakeholders. Said topics are analyzed by the company’s different areas and, to the extend it is consideredappropriate, lead to a response by the company, which aims to improve said stakeholders’ satisfaction withthe topics thus identified. In general terms, the most relevant thematic areas which were dealt with in 2016are summed up in the following table:

Table 36.- Main topics of interest to stakeholders

Stakeholder Main topics broached by each group

Customers Codes of conduct and anti-corruption practices

Labor practices

Health and safety policies

Human rights in the working environment and supply chain

Climate change policies and emission controls

General economic management

Product responsibility

Environment of renewable energy

Shareholders, investors, ESGanalysts and indexes

Corporate governance, policies practices and model, General Shareholders’ Meeting

Economic and financial situation and general economic management

Resolution of conflict of interest cases

Supplier relationship policies based on ethical principles

Position in the renewable energy sector

Public administrationsand regulators

General sustainability practices

Reporting transparency practices

Good corporate governance

Climate change undertakings

Employees General labor conditions

Health and safety conditions

Training offers and practices to promote employability

Suppliers Responsible procurement policies and practices

Procurement area’s knowledge of and relationship with suppliers

Supplier development

Society and community Contribution of Gamesa to society as a whole

Environment and products, environmental impact

Community relations policies and management systems

Identification and management of company projects’ social impact

Policy to contribute to local development through social investment programs

Mass media The company’s strategy and positioning

Topics connected with good corporate governance

Economic and financial topics

Position in the renewable energy sector

Gamesa can provide direct responses and through the above-mentioned channels of engagement and thedifferent public reporting formats it has developed, of which this report is a good example, with themethodology described in the previous sections and the processes to identify material aspects described insections G4-18 to G4-21.

CORPORATE RESPONSIBILITY REPORT 2016 | PART I. GENERAL DISCLOSURESSection I.05 – REPORT PROFILE


I.05.- REPORT PROFILE

G4-28 Reporting period

Financial year 2016. This sustainability report is the thirteenth (13th) published by Gamesa on an annual basis.The period covered by this document reflects Gamesa’s activities in 2016 and also provides information onsome significant events in the first quarter of 2017.

G4-29 Date of previous report

Financial year 2015 (published in April 2016)

G4-30 Reporting cycle of the report

Annual

G4-31 Contact point for questions regarding the report

For any general question concerning the report, please contact:

Gamesa Corporación Tecnológica, S.A.Corporate Social Responsibility DepartmentParque Tecnológico de Bizkaia, Edificio 22248170 Zamudio, Vizcaya, SpainTel No.: 902.73.49.49e-mail: [email protected]

This full document is only available in electronic format in either Spanish or English on the Gamesa corporatewebsite (www.gamesacorp.com).

GRI Content Index

G4-32 GRI Index regarding the “in accordance” option chosen

This report has been drawn up following the comprehensive option of the Global Reporting Initiative GRI-G4Guidelines. The GRI G4 Content Index has been placed in Appendix I (p. 158 of this report) due to its length.

Assurance

G4-33 External assurance of the report

An external organization has been asked to independently assure the information on social andenvironmental practices contained in this report for the eleventh (11th) year in a row. Ernst & Young wascommissioned to conduct such assurance and the independent external assurance report is included inAppendix II (p. 164) of this report.

CORPORATE RESPONSIBILITY REPORT 2016 | PART I. GENERAL DISCLOSURESSection I.06 – GOVERNANCE


I.06.- GOVERNANCE

Governance structure and composition

G4-34 Governance structure

Gamesa’s governance structure is based on two main bodies, namely: the General Shareholders’ Meetingand the Board of Directors30.

General Shareholders’ Meeting

The General Shareholders’ Meeting is the meeting of the company’s shareholders that, once duly convened,shall decide by majority voting on the issues within its powers. All shareholders, including those that do nottake part in the General Meeting or who have expressed their disagreement, are subject to the resolutionstaken at the General Meeting, without prejudice to their legal right to challenge such resolutions.

The General Meeting takes resolutions on all issues that lie within its powers in accordance with the Law, theArticles of Association and the General Meeting Regulations31.

Table 37.- General Meeting attendance data

2016 2016 2015 2014 2013 2012

General Meeting 25/10/2016 22/06/2016 08/05/2015 28/05/2014 19/04/2013 29/06/2012% personal attendance 23.13% 24.41% 24.37% 22.73% 21.88% 23.66%% by proxy 34.80% 34.83% 34.51% 26.49% 17.17% 8.43%% remote voting 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Total attendance 57.93% 59.24% 58.88% 49.22% 39.05% 32.09%Note: An Extraordinary General Shareholders’ Meeting was held in 2016. Additional information can be found in the AnnualCorporate Governance Report 2016, Section B.

Board of Directors

The Board of Directors’ mission is to promote the company’s interests, represent the company and itsshareholders in the management of its assets, manage the business and direct the business’s administration.

Apart from the matters reserved for the powers of the General Shareholders’ Meeting, the Board ofDirectors is Gamesa’s highest representative and decision-making body. It has no substantial constraintsapart from those laid down in legislation and the Articles of Association, particularly regarding the company’scorporate purpose.

The Board of Directors conducts general oversight and sets general strategies and policies. It likewise dealswith the company’s relevant issues and its responsibilities (Article 7 of the Board of Directors Regulations).

The criteria which must at all times govern the Board of Directors’ actions are unity of purpose,independence of judgment and Gamesa’s corporate interest, which is materialized in maximizing thecompany’s economic value in a sustainable fashion (Article 6 of the Regulations). Regarding such issues, it isparticularly important that the Board of Directors adopts all the necessary measures to ensure that corporatemanagement and the Chief Executive Officer are under the effective oversight of the Board of Directors andthat no single individual or a small group of people hold decision-making powers not subject to checks andbalances.

30Please note that all the information on the Board of Directors and it Committees included in this report was closed on December 31, 2016.

The merger of Gamesa with Siemens' wind power business was officially announced as a Relevant Disclosure at the registry of the Spanish

Securities Market Commission (CNMV) on April 3, 2017. On April 5, 2017, the company gave notice of the Board of Directors' resolutions on

the compositions and offices thereof and of its Committees, as well as of the review of the company's Corporate Governance Rules (CNMV

registration No.: 250331. Link: https://www.cnmv.es/Portal/HR/verDoc.axd?t={d962dd19-03c0-4e30-ab9d-64dbede8ca90} )31

See link to the General Shareholders' Meeting Regulations: (Article 6.-Powers of the General Shareholders' Meeting). Link:

http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-corporativo/reglamentos-estatutos/reglamento-junta-

general-accionistas.pdf



Table 38.- Table on the Board of Directors’ composition (at December 31, 2016):

Name or trade nameof director

Office held in theBoard

Date firstappointed

Date lastappointed

Appointmentprocedure

Martín San Vicente, Ignacio Chairman and ChiefExecutive Officer

23/05/2012 22/06/2016 General Meeting

Arregui Ciarsolo, Juan Luis Deputy Chairman 28/01/1976 19/04/2013 General Meeting

Rodríguez-Quiroga Menéndez, Carlos Director and Secretary 27/09/2001 19/04/2013 General Meeting

Vázquez Egusquiza, José María Director 25/05/2007 19/04/2013 General Meeting

Lada Díaz, Luis Director 23/10/2009 19/04/2013 General Meeting

Aracama Yoldi, José María Director 08/03/2011 19/04/2013 General Meeting

Rubio Reinoso, Sonsoles Director 14/12/2011 22/06/2016 General Meeting

Aldecoa Sagastasoloa, José María Director 25/07/2012 19/04/2013 General Meeting

Villalba Sanchez, Francisco Javier Director 25/02/2015 08/05/2015 General Meeting

Cendoya Aranzamendi, Andoni Director 08/05/2015 08/05/2015 General Meeting

Hernández García, Gloria Director 08/05/2015 08/05/2015 General Meeting

Codes Calatrava, Gerardo Director 14/09/2016 25/10/2016 General Meeting

Cortajarena Manchado, José Antonio Deputy Secretary,Non-Member

N/A N/A N/A

Information on the Board of Directors’ composition, as well as the personal and biographical profiles of itsmembers can be found in section C.1.3 of the Annual Corporate Governance Report and on the company’swebsite. Likewise, a table containing information on the number of female directors in the last four years canbe found in section C.1.432.

The Boards’ Committees

The Board of Directors of Gamesa has an Executive committee endowed with general decision-makingpowers and three specialized committees to deal with specific areas of activity entrusted with powers toreport, advice, put forward proposals and exercise oversight and control: the Audit and ComplianceCommittee, the Appointments Committee and the Remuneration Committee. Information on theseCommittees can be found in the Annual Corporate Governance Report.

Executive Committee

At its meeting held on January 10, 2012, the Board of Directors resolved, after having received a favorablereport from the Appointments and Remuneration Committee, to set up an Executive Committee comprisedof five (5) members to which all powers are to be delegated, except those which cannot be delegated underthe Law and the Articles of Association. The details on its regulations and functioning are set forth in Article23 of the Board Regulations33.

Table 39.- Table on the Executive Committee’s composition (at December 31, 2016):

Name Office Type Representation

Martín San Vicente, Ignacio Chairman Executive N/A

Arregui Ciarsolo, Juan Luis Member Non-Executive Independent N/A

Aldecoa Sagastasoloa, José María Member Non-Executive Independent N/A

Lada Díaz, Luis Member Non-Executive Independent N/A

Codes Calatrava, Gerardo Member Non-Executive Proprietary Iberdrola, S.A.

Rodríguez-Quiroga Menéndez, Carlos Secretary, Non-Member N/A N/A

Cortajarena Manchado, José Antonio Deputy Secretary, Non-Member N/A N/A

32Link: http://www.gamesacorp.com/es/accionistas-inversores/gobierno-corporativo/informe-anual-de-gobierno-corporativo/

33Link: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-corporativo/informes-gobierno/informe-anual-de-

gobierno-corporativo-2016.pdf



Audit and Compliance Committee

The Audit and Compliance Committee shall have a minimum of three (3) and a maximum of five (5) non-executive directors, a majority of whom must be independent directors. The Board of Directors shallendeavor to ensure that the members of the Audit and Compliance Committee, and particularly at least oneof the independent directors appointed to it, have knowledge and experience of accounting, auditing or riskmanagement matters.

In keeping with international best practices that require a majority of independent members, this committeeis currently comprised as follows:

Table 40.- Table on the Audit and Compliance Committee’s composition (at December 31, 2016):


Hernández García, Gloria Chairman Non-Executive Independent N/A

Rubio Reinoso, Sonsoles Member Non-Executive Proprietary Iberdrola, S.A.

Vázquez Egusquiza, José María Member Non-Executive Independent N/A

Aracama Yoldi, José María Member Non-Executive Independent N/A


The Audit and Compliance Committee’s basic responsibilities are set forth in Articles 5 to 12 of the Audit andCompliance Committee Regulations. The consolidated text of the Audit and Compliance CommitteeRegulations strengthened the powers of the Audit and Compliance Committee in accordance with the newresponsibilities set forth in Act 19/1988 of 12 July on the Auditing of Accounts as a result of the amendmentmade by Act 12/2010 of 30 June and also to fulfill the recommendations set forth in the Code of GoodGovernance issued by the Spanish Securities Market Commission.

Thus, new powers are required by the Audit and Compliance Committee, such as reviewing the weaknessesof the internal control system together with the auditors, overseeing its effectiveness and the obligation toissue an annual report prior to issuing the audit report expressing an opinion on the auditors’ independence.

The Audit and Compliance Committee may seek external professional advice to better fulfill its duties. TheAudit and Compliance Committee issues its own annual activity report, which is made publicly available onthe company’s website34.

It should be noted that the Board of Directors resolved to approve the amendment of the Audit andCompliance Committee Regulations at its meeting held on February 22, 2017. The aforementionedamendment was essentially technical in nature and mainly aimed at adapting the Committee’s powers to thenew contents set forth in Article 529m of the Corporate Enterprises Act

A series of reforms aimed at advancing in the implementation of the recommendations set forth in the Codeof Good Governance were included.

34Link http://www.gamesacorp.com/es/accionistas-inversores/gobierno-corporativo/comisiones-del-consejo/comision-auditoria-

cumplimiento.html



Appointments Committee

The Board of Directors resolved to separate the Appointments and Remuneration Committee into twoseparate Committees on 16 December 2015. The Appointments Committee shall have a at least three (3) andat most five (5) non-executive directors. The Board of Directors shall endeavor to ensure that the membersof the Appointments Committee are appointed taking into account their knowledge, capacity and experiencein the matters entrusted to the Appointment Committee. This Committee’s basic responsibilities are set forthin Articles 5 to 7 of the Appointments Committee Regulations.

In keeping with international best practices that require a majority of independent members, it is currentlycomprised as follows:

Table 41.- Table on the Appointments Committee’s composition (at December 31, 2016):


Cendoya Aranzamendi, Andoni Chairman Non-Executive Independent N/A

Aracama Yoldi, José María Member Non-Executive Independent N/A

Villalba Sanchez, Francisco Javier Member Non-Executive Proprietary N/A


Remuneration Committee

The Remuneration Committee shall have at least three (3) and a at most five (5) non-executive directors. TheBoard of Directors shall endeavor to ensure that the members of the Remuneration Committee areappointed taking into account their knowledge, capacity and experience in the matters entrusted to theRemuneration Committee. This Committee’s basic responsibilities are set forth in Articles 5 and 6 of theRemuneration Committee Regulations.

In keeping with international best practices that require a majority of independent members, it is currentlycomprised as follows:

Table 42.- Table on the Remuneration Committee’s composition (at December 31, 2016):


Cendoya Aranzamendi, Andoni Chairman Non-Executive Independent N/A

Arregui Ciarsolo, Juan Luis Member Non-Executive Independent N/A

Villalba Sanchez, Francisco Javier Member Non-Executive Proprietary N/A


G4-35 Delegation of authority from the highest governance body to senior executives and other employees

The Executive Committee and the Chairman and Chief Executive Officer have been delegated with all theBoard of Directors’ powers, except those which cannot be delegated according to the Law or the Articles ofAssociation.

Furthermore, the Board of Directors has a structure of executives and employees who are attorneys in fact toimplement its strategy and basic management guidelines. The powers included in the powers of attorney aregranted according to two main principles: the first is the principle of joint signing, which governs anyeconomic, dispositional or organizational powers and the other is the principle of severally signing, whichgoverns any powers that are merely representational in nature.

These principles are set forth in an internal rule approved by the Chief Executive Officer, which lays down thesame scheme for the bodies of governance of other companies in Grupo Gamesa.



G4-36 Executive-level positions with responsibility for economic, environmental and social topics

The company’s organization is equipped with departments holding responsibility for the economic, social andenvironmental areas attributed to general departments, the highest-ranking officers of the threedepartments mentioned above form part of the Management Committee, which is chaired by the Chairmanand Chief Executive Officer, thereby ensuring that information reaches the Board of Directors directly.

Aside from the foregoing, the highest-ranking officers of these departments appear before the Board ofDirectors when they are required to do so.

Table 43.- Table on the organization’s operating structure

Office / Position Name and Surname(s)

Executive Chairman Ignacio Martín San Vicente

Executive General Manager Xabier Etxeberría Muguruza

Chief Corporate Officer - Legal Counsel José Antonio Cortajarena Manchado

Chief Financial Officer Ignacio Artázcoz Barrena

Chief Business Development Officer David Mesonero

Internal Auditing Manager Félix Zarza Yabar

G4-37 Processes for consultation between stakeholders and the Board of Directors

The company has a Shareholder Information Office which deals with shareholders on a daily basis andresponds to any queries they may raise. The aforementioned office is coordinated by the Investor RelationsDepartment, which reports directly to the Chairman. Shareholders can ask questions by telephone,traditional mail or e-mail. The various addresses and numbers are posted on the company’s website.

In accordance with Article 21 of the General Shareholders’ Meeting Regulations, on the day the GeneralShareholders’ Meeting is held, the Shareholder Information Office responds to any questions raised by thosein attendance regarding the meeting’s proceedings prior to the meeting itself without prejudice to theshareholders’ right to speak, table proposals and vote granted to them by the Articles of Association. It alsodeals with and informs those in attendance and shareholders who wish to take the floor, draws up a list ofthose who have previously expressed their wish to intervene and compiles the texts of their interventions, ifthey are available in writing.

In accordance with prevailing legislation, any shareholders representing at least three (3) per cent of thecompany’s share capital may request the publication of an addition to the General Shareholders’ Meetingannouncement that includes one or more points on the agenda. This right shall be exercised by means ofgiving the Board of Directors’ Secretary irrefutable notice thereof, which must be received at the company’sregistered address within five (5) days from the date the announcement of the General Shareholders’Meeting is published.

The Board of Directors shall do everything that may be required to verify, justify and publish the addition tothe announcement and shall resolve as many questions or issues as may arise in relation to the addition andthe publication thereof.

Likewise, any shareholders representing at least three (3) per cent of share capital may table groundedproposals for resolutions on any issues already included or which are to be included in the agenda of theGeneral Shareholders’ Meeting within the same time limit set forth in the preceding paragraph.

In accordance with Article 539.2 of Corporate Enterprises Act, the company set up an electronicshareholders’ forum when the 2016 General Shareholders’ Meeting and Extraordinary General Shareholders’Meeting held on October 25, 2016 were called in order to facilitate communications among Gamesashareholders between the date of the call and the date of the General Meeting. Registered users could sendcommunications to be posted on said forum solely for the following purposes:

Proposals they would like to put forward as additions to the agenda published in the General Meetingannouncement.



Requests for support for such proposals.

Initiatives aimed at reaching the necessary percentage to exercise minority rights provided for by Lawor in the internal regulations of Gamesa Corporación Tecnológica, S.A.

Voluntary proxy offers or solicitations.

It should likewise be highlighted that any contents which must be published are accessible from thewebsite’s home page, as well as in the “Shareholders and Investors” section in accordance with the SecuritiesMarket Act, the Corporate Enterprises Act, Circular 3/2015 of June 23 of the National Securities MarketCommission (CNMV) and Order ECC/461/2013 of March 20 of the Ministry of the Economy andCompetitiveness.

G4-38 Composition of the highest governance body

The composition of the company’s highest governance body is duly set out in section G4-34 (p. 58) of thisreport and in the Annual Corporate Governance Report.

According to the information set out in the aforementioned section G4-34, the Board of Directors is made upof twelve members, of whom two are executive directors, three are proprietary directors and the remainingseven are independent directors.

That same section also provides a breakdown of the composition of each of the Board of Directors’Committees, including: the Executive Committee, the Audit and Compliance Committee, the AppointmentsCommittee and the Remuneration Committee.

G4-39Report whether the chair of the highest governance body is also an executive officer and the reasons forthis arrangement

The Chairman of Gamesa is also the company’s Chief Executive Officer and is therefore its highest-rankingexecutive officer.

After receiving a favorable report from the Appointments Committee, Gamesa’s Board of Directorsunanimously resolved to reappoint Mr. Ignacio Martín San Vicente as Chairman of the Board of Directors andas the company’s Chief Executive Officer at its meeting held on June 22, 2016. It delegated all powers to himthat correspond to the Board of Directors according to Law and the Articles of Association, except those thatmay not be delegated.

The following basic powers correspond to the Chairman of the Board of Directors:

To convene the Board of Directors, either himself or through the Board Secretary, and set its agenda,which is obligatory, as well as to include in the agenda any matters requested by the leadindependent director or by at least three directors;

To direct the Board of Directors’ deliberations;

To organize and coordinate with the Chairmen of the relevant committees the Board of Directors’periodic assessment, as well as of the Chief Executive Officer or highest-ranking executive;

To bring proposals before the Board which he may deem appropriate to ensure the company isproperly run, especially concerning how the Board itself and other corporate bodies are run, and topropose people to hold the offices of Deputy Chairman, Secretary and Deputy Secretary of the Board.

In his office as the company’s highest-ranking officer, he holds responsibility for the effective management ofthe company’s business in accordance with the resolutions and criteria adopted by the General Shareholders’Meeting and the Board of Directors within their respective areas of responsibility. The aforementionedoperations shall be brought before the Board of Directors or the Executive Committee, as appropriate.



Regarding the reasons justifying an Executive Chairman, the following considerations should be taken intoaccount:

1.- When assessing the advantages and disadvantages of joining or separating the offices of Chief ExecutiveOfficer and Chairman of the Board of Directors35, the Code of Good Governance for Listed Companiesdoes not oppose joining both powers. It only indicates that it should be accompanied by the necessarychecks and balances (Recommendation 34 of the Code of Good Governance).

Gamesa has taken various measures along these lines to reduce any risks arising from concentratingpower in a single person, which are as follows:

Appointing one of the company’s Independent Directors as Deputy Chairman;

Appointing one of the company’s Independent Directors as the Lead Independent Director;

Absence of the Chairman and Chief Executive Officer at the meetings held by the Board’sconsultative and supervisory committees (Audit and Compliance Committee, AppointmentsCommittee and Remuneration Committee);

Powers of the Board of Directors and reserving certain powers for the Executive Committee as acollegiate body;

Assessment conducted on the Chairman and Chief Executive Officer by the Board of Directors, aprocess which is led by the Appointments Committee.

2.- It reflects Spanish tradition, as only 31% of Ibex-35 companies have chosen to separate these offices(Spain Board Index 2016, Spencer Stuart36). This originates from the high percentage of business,financial or family groups that are major or controlling shareholders in Spanish companies. This situationis not unknown to Gamesa, where there is an important shareholder (Iberdrola, S.A.) which exerts acontrolling interest and limits the risk of excessive power being vested in an executive chairman.

3.- In some countries highly developed in the area of corporate governance, the reality of this issue doesnot in all cases suggest the separation of offices. In the United States, 52% of the companies listed onthe S&P 500 have an executive chairman (Spain Board Index 2016, Spencer Stuart). In addition, Section972 of the Dodd-Frank Act (July 2010) requires – like the Spanish Unified Code of Good Governance – anexplanation for joining the offices and the reasons behind it should an accumulation of offices exist.

4.- Lastly, regarding the reasons for having an Executive Chairman, if adequate control and oversight of therisk, as well as the best management of any possible conflicts of interest are among the main argumentsused to promote the separation of offices, there are equally valid and more efficient alternatives.Gamesa has such solutions:

a) A risk control system: Gamesa is equipped with a well-honed organizational structure that providesvalue by working on risk control and management.

b) Appropriate regulations and oversight of potential conflicts of interest and transactions withsignificant shareholders that require, on the one hand, an obligation of internal reporting,abstention of the affected parties from all deliberations and decisions and, finally, a prior reportissued by the Audit and Compliance Committee or the Remuneration Committee, along with ajustified decision by the Board of Directors (Article 31 of the Board of Directors Regulations)

Information on the Executive Chairman can be found in sections C.1.2, C.1.3, C.1.10 and C.1.22 of the AnnualCorporate Governance Report. Information on the risk control system can be found in section E of the AnnualCorporate Governance Report and information on conflicts of interest in section D.6 of the aforementionedreport.

35CNMV Code of Good Governance for Listed Companies:

http://www.cnmv.es/docportal/publicaciones/codigogov/codigo_buen_gobierno.pdf36

Spencer Stuart Board Index 2016: https://www.spencerstuart.com/research-and-insight/spain-board-index-2016



G4-40 Nomination and selection processes for the highest governance body

In the different assessment processes commissioned to external companies, the Board of Directors identifiesthe backgrounds and competencies it requires to ensure it fulfills its responsibilities better and moreefficiently. Based on the assessment’s results, once a vacancy or the re-election of Directors arises, thecircumstances are assessed and candidates are actively sought that have certain competencies. In generalterms, an effort is made to seek candidates of the gender having less representation. Among the specializedknowledge and experience required for the selection of members of the Board of Directors, candidateshaving knowledge about international business needs stand out, especially about all the dimensions of themarkets where Gamesa operates, particularly the economic, environmental and social dimensions.

In accordance with its internal rules, Gamesa’s Board of Directors shall be comprised in such a way so thatnon-executive directors, with the presence of independent directors, represent a majority over executivedirectors. The Board of Directors shall likewise attempt to ensure that the majority group of non-executivedirectors includes proprietary and independent directors.

The Board of Directors Regulations (Article 11) make reference to the law and, pursuant to Article 529k ofthe Corporate Enterprises Act, deems the following non-executive directors as independent:

Proprietary directors: any directors (i) who hold an interest which is equivalent to or exceeds thefigure legally deemed as significant or appointed due to their status as a shareholder despite the factthat their interest does not reach such figure; or (ii) whose appointment has been proposed to thecompany by the shareholders referred to in item (i) above. For the purpose of this definition, it shallbe construed that a director has been proposed to the company by a shareholder where the director:(i) has been appointed through the right of representation being exercised; (ii) is a director, seniorexecutive, employee or non-occasional service provider of such shareholder or companies belongingto its same group; (iii) it can be deduced from corporate documents that the shareholder assumesthat the director represents or has been appointed by such shareholder; (iv) is the spouse or a relatedparty of the shareholder through an analogous personal relationship, or a relative up to the seconddegree of kinship.

Independent directors: directors appointed due to their personal or professional qualities and able toperform their functions without being conditioned by relationships with the company, its significantshareholders or its executives.

Other non-executive directors: any non-executive directors not deemed as proprietary orindependent directors.

Furthermore, Article 529k(4) of the Corporate Enterprises Act sets forth that the following shall under nocircumstances be appointed as independent directors:

a) Anyone who has been an employee or executive director of group companies, except where three(3) or five (5) years have respectively elapsed since they stood down from such offices.

b) Anyone who receives from the company or its group any amount or benefits for an item other thanremuneration as a director, except where such amount or benefits are insignificant for the director.For the purpose set forth in this item, neither dividends nor pension scheme complements receivedby the director arising from his/her previous professional or employment relationship shall be takeninto consideration, as long as such complements are unconditional and consequently the companypaying them out may not discretionally suspend, amend or revoke their payment without breachingits obligations.

c) Anyone who is or has been a partner of the external auditor or those holding responsibility for theauditor’s report during the last three years, whether it be of the listed company’s audit or of anyother group company during the aforementioned period.

d) Anyone who is an executive director or senior executive of another company in which someexecutive director or senior executive of the company is a non-executive director.

e) Anyone who maintains or has maintained during the past year a significant business relationshipwith the company or with any of the companies of its group, be it on their own behalf or as asignificant shareholder, director or senior executive of an organization that maintains or hasmaintained such a relationship. The provision of goods or services, including financial and advisory orconsultancy services, shall be construed as business relationships.

f) Anyone who is a significant shareholder, an executive director or a senior executive of anorganization that receives or has received during the last three (3) years donations from the



company or its group. Anyone who is simply a governing board member of a foundation thatreceives donations shall not be included among those set forth in this paragraph.

g) Anyone who is the spouse or a related party through an analogous relationship of the director orsenior executive of the company, as well as their family members up to the second degree of kinship.

h) Anyone whose appointment or renewal has not been put forward by the appointments committee.

i) Anyone who has been a director for a continuous period exceeding twelve (12) years.

j) Anyone finding themselves in any of the circumstances set forth in paragraphs a), e), f) or g) abovewith respect of a significant shareholder or party represented on the board. In the case of the familyrelationship set forth in paragraph g), the limitation shall not only apply with respect of theshareholder but also the shareholder’s proprietary directors in the investee company.

Proprietary Directors whose condition as such ceases to be the case as a result of the shareholder who putforward his/her appointment selling their interests may only be reappointed as independent directors whenthe shareholder they have represented up to that moment has sold all their shares in the company.

Directors who own an interest in the company may be considered as independent directors, provided theymeet all the conditions set forth in this article and where their interests do not constitute a significantshareholding.

Information on the composition of the governing body can be found in the Annual Corporate GovernanceReport in sections C.1.2 and C.1.3 and on the company’s website.

G4-41 Procedures to ensure conflicts of interest are avoided in the highest governance body

Section D.6 of the Annual Corporate Governance 2016 describes the mechanisms implemented to detect andresolve any possible conflicts of interest between Gamesa and its directors, executives and significantshareholders. It sets out details on:

Mechanisms to detect and correct possible conflicts of interest between the company and/or itsgroup and its directors;

Mechanisms to detect and correct possible conflicts of interest between the company and/or itsgroup and its executives;

Mechanisms to detect and correct possible conflicts of interest between the company and/or itsgroup and its significant shareholders;

Relationships of directors and/or significant shareholders with group companies.

The company has had a specific rule entitled “Rule on the Prevention of Conflicts of Interest and/or Cases ofCorruption and/or Bribery” to complement this information since 2009, which was last reviewed in 2016 andresulted in approval of a separate rule entitled “Rule on the Prevention of Conflicts of Interest of Interest”,which was approved by the Ethics and Compliance Department. Both rules implement points 3.8 (CombatingFraud. Rejecting Corruption and Bribery) and 3.9 (Avoiding Conflicts of Interest) of the Code of Conduct.

The aforementioned rules are comprised of a set of guidelines addressing honesty, impartiality andprofessionalism. They serve as a guideline for the behavior of Gamesa’s entities and people, placing specialattention on third parties. The rules enable the company to take a firm stance in the relevant markets basedon respect of and consideration for shareholders, employees, customers, suppliers, contractors andcollaborators of the company, along with public authorities and the community as a whole through Gamesa’sactions.

The “Crime Prevention and Anti-Fraud Policy” is likewise worth mentioning. It was approved in 2011 andserves as a general framework for the crime prevention and anti-fraud model. The policy and the model(implemented through manuals) were last amended through a resolution taken by the Board of Directors onSeptember 23, 201537.

The Code of Conduct, its implementing rules mentioned above and the Gamesa Crime Prevention and Anti-Fraud Manual (general part approved by the Board of Directors on September 23, 2015 and special partapproved by the Ethics and Compliance Department on the same date) are the main pillars of this model.

37Gamesa's Crime Prevention and Anti-Fraud Policy: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-

corporativo/politicas-corporativas/politicas-gobierno-corpor/politica-para-la-prevencion-de-delitos-y-contra-el-fraude.pdf



Additionally, the manuals of the main Spanish companies were approved on February 2, 2016 by the relevantgoverning bodies (general part of said manuals) and the Ethics and Compliance Department (special part ofsaid manuals).

In general, the mechanisms used to detect, identify and resolve possible conflicts of interest between thecompany and/or its group and its directors, executives and significant shareholders are based on thefollowing rules on their powers:

a) The Board of Directors or the General Shareholders’ Meeting hold among their basic powers thepower to authorize operations or transactions that could involve conflicts of interest (i) with thecompany and group companies; (ii) with the company and the group’s directors and their relatedparties; (iii) with shareholders holding a significant interest or represented on the Board of Directorsand their related parties; (iv) with senior and other executives; as well as (v) any other relevanttransaction involving the same, except where the dispensation is preceded by the relevant report by(a) the Audit and Compliance Committee on transaction subject to a possible conflict of interest inwhich the adoption of a specific resolution on it is proposed, or (b) the Appointments Committee andthe Remuneration Committee if it has to do with dispensing with fulfilling contractual obligations(pursuant to the provisions set forth in Articles 31 and 33 of the Board Regulations).

b) The basic responsibilities of the Audit and Compliance Committee include providing informationabout transactions that entail or could entail conflicts of interest or about transactions withshareholders owning a significant interest and, in general terms, concerning the matters set forth inChapter IX of the Board of Directors Regulations.

c) The Remuneration Committee shall inform about transactions that involve a conflict of interestwhere dispensing with the fulfillment of director’s contractual obligations is concerned.

Gamesa provides information about any transactions it may effectuate with directors, major shareholdersand related parties in the periodic financial reporting process and within the scope laid down by the Law.This likewise includes information about the transactions of the company or group companies withadministrators and related parties, as well as with whoever may act on their behalf, where such transactionsare not within the normal course of business or are not carried out under normal market conditions. Thisinformation is also available in section D.2 of the Annual Corporate Governance Report.



Highest governance body’s role in setting purpose, values, and strategy

G4-42Highest governance body’s and senior executives’ roles in the development, approval, and updating of theorganization’s purpose, value or mission statements, strategies, policies and goals

Gamesa’s values have been the following since 2010: Teamwork, Innovation, Excellence, Respect andSustainability.

Furthermore, Gamesa considers the following as attitudes for success: leadership, a global company andbeing customer-driven.

Gamesa’s corporate principles and values apply across the entire company in all its different regions and toall the businesses which comprise it.

These Values, as well as the Principles of Corporate Social Responsibility are reflected in the Gamesa Code ofConduct38 and govern the conduct of the companies making up Gamesa. They also govern people in theperformance of their duties and work, as well as in their commercial and professional relationships in orderto consolidate a universally accepted corporate ethics.

The Code of Conduct has been reviewed periodically since its first edition was published in 2005. The reviewmade in 2016 is currently in force, which is available to employees on the website and intranet together withthe main changes made to the rules and their scope. It is also posted on bulletin boards and explanatorychats on it are given to workers without a corporate intranet connection, which are planned by the Ethicsand Compliance Department on an annual basis.

Highest governance body’s competencies and performance evaluation

G4-43 Highest governance body’s collective knowledge of economic, environmental and social topics

Gamesa’s governance model is structured on the following bases:

The Board of Directors: the highest body of governance which sets and approves the company’sstrategies and general policies, the business plan and annual budgets, and oversees their attainment.The general policies approved by this body are grouped together in three subgroups, these being:corporate governance policies and regulatory compliance, risk policies and social responsibility policies.

The Executive Committee: a collegiate set up within the Board of Directors to facilitate the effectivemanagement of the company’s business. This body provides support to the Board of Directors’decision-making in a context marked by the company’s increasing globalization and has the power toadopt decisions, allowing them to be taken more quickly, rapidly and directly.

Chairman and Management Team (Executive Committee and Management Committee): with thesupport provided by the Executive Committee and the company’s senior executives, the Chairman andChief Executive Officer holds responsibility for the group’s strategic organization and coordination bydisseminating, implementing and monitoring the basic management strategy and guidelines set by theBoard of Directors. The Executive Committee is comprised of senior executives and provides technical,information, management and decision-making support on the setting, oversight, organization andmonitoring of general management guidelines, as well as on the strategic planning of the business.

The Audit and Compliance Committee and Internal Auditing (Business Risk Control): the Audit andCompliance Committee oversees the internal risk control and management systems on a monthlybasis, among other matters. The Internal Auditing Department provides independent supervision of theinternal control system and reports to the Audit and Compliance Committee. The Corporate BusinessRisk Control (BRC) Department sets guidelines and coordinates activities with the Risk ControllerNetwork and BRC managers in the different geographic areas. It also appears before the Audit andCompliance Committee.

38http://www.gamesacorp.com/es/sostenibilidad/sostenibilidad-mision-y-valores.html



The Appointments Committee: handles the recruitment process for members of the Board of Directorsand assesses the appointment of senior executives.

The Remuneration Committee: proposes the director and senior executive remuneration policy to theBoard of Directors and is in charge of its oversight.

A significant number of senior executives from the company’s different areas and departments appearedbefore the committees in 2016 in order to give an overview to the committees’ members within theframework of overseeing economic performance:

Human Resources: three (3) times before the Appointments Committee.

Different departments: 69 times before the Audit and Compliance Committee. (see table)

Table 44.- Appearances of senior executives before the Audit and Compliance Committee 2016

Department Number of appearances

Internal appearances:Chairman and CEO 2General Finance Department 13

General Business Development Department 1General Counsel’s Office and General Corporate Department 12Tax Area Manager 2Financing Projects Department 1

Internal Auditing Department (*) 6Legal Department 2General Services Unit Department 1Sales Department 4

Ethics and Compliance Department (*) 6Business Risk Control Department 3Management Control Department 1Social Responsibility Department 2

Consolidation Department 3Subtotal 61

External appearances:Auditor of accounts (*) 5

Consultants 3Subtotal 8

Total appearances 69

(*) This number of appearances solely includes direct participation in matters under their responsibility. Regularappearances before the Committee’s meetings to help it fulfill its duties properly and as a communications channelwith the organization are not included.



G4-44 Highest governance body’s performance

Article 33.5(j) of the Articles of Association and Article 7.3(d)(iv) of the Board of Directors Regulations setforth that one of the powers reserved for the Board of Directors shall be “to assess and supervise the qualityand efficiency with which the Board of Directors and its committees are run, in addition to assessing theperformance of the Chairman and the Chief Executive Officer, if any, with regard to their duties”.

Article 7.8 of the Appointments Committee Regulations39 sets forth that one of Appointment Committee’sduties shall be “to promote the annual performance assessment process on the performance of the Chairmanof the Board of Directors, the Chief Executive Officer, if any, the Executive Committee, the Audit andCompliance Committee, the Remuneration Committee, the Lead Director and any other consultativecommittee set up in accordance with the provisions set forth in the corporate governance rules”.

Gamesa relied on the support of external consultants to conduct the assessment of its governance bodies in2016. Said assessment did not give rise to any changes in its internal organization or to any procedures whichapply to said bodies’ activities.

Highest governance body’s role in risk management

G4-45Highest governance body’s role in the identification and management of economic, environmental andsocial impacts, risks and opportunities, including its role in the implementation of due diligence processesand stakeholder consultation

Gamesa is equipped with several Risk Control and Management Systems which are included under itscorporate governance rules within an internal reference framework which we call ERM (Enterprise Risk &Management). ERM is considered at the highest level, starting off, on the one hand, from the guidelines setforth in the Board of Directors Regulations (Articles 6 and 7) and in its delegated committees’ regulations –essentially the Audit and Compliance Committee Regulations (Articles 9 and 11) – and, on the other, fromprestigious international methodologies (COSO, ISO/CD 31000 y EFQM).

ERM Risk Control and Management Systems are promoted by the Board of Directors and senior managementand have been implemented across the entire organization following the strategic guideline of globalizingindustrial, technological and commercial activities in the different geographic areas where the companyoperates. They provide a global integrated overview that contributes to achieving business objectives, inaddition to creating value for different stakeholders and aiding the organization’s sustainable and profitabledevelopment.

The basis of these systems is to be found the General Risk Control and Management Policy40, which wasinitially approved by the Board of Directors on April 22, 2009 and last amended on September 23, 2015. Thislatest version established the bases and general context upon which key ERM elements are based.

Risk management in Gamesa’s ERM evolves by applying the principle of continuous improvement, audits,self-assessments, benchmarking, as well as through taking into consideration renowned references. Theassessment conducted by Euskalit on Gamesa’s overall management (and, as part of it, on the ERM’smanagement) in accordance with the advanced management model should be highlighted for 2016(Gamesa’s management model was granted a gold quality award).

39Gamesa's Appointments Committee Regulations: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-

corporativo/comisiones-consejo/reglamento-de-la-comision-de-nombramientos.pdf40

Gamesa's General Risk Control and Management Policy: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-

corporativo/politicas-corporativas/politicas-riesgos/politica-general-de-control-y-gestion-de-riesgos.pdf



Regarding the highest governance body and its committees, dependent bodies and the main duties each ofthem performs on the Risk Control and Management System, the following are worth highlighting:

Board of Directors: sets general policies and strategies, including the company’s Risk Control andManagement Policy and tax strategy, and monitors their implementation, while also supervisinginternal reporting and control systems.

Audit and Compliance Committee: Among other functions, it has been entrusted by the Board ofDirectors with the functions of:

o Safeguarding the independence and effectiveness of the Internal Auditing Department andperiodically reviewing the internal control and risk management systems’ effectiveness, includingtax risks, to identify, analyze and properly report on the main risks.

o Ensuring that the risk control and management policies identify the different kinds of risks(operational, technology, financial, legal, reputation-related, etc. risks) faced by the companyand its group, including contingent liabilities and other out-of-balance risks among financial risks,as well as the risk levels the company and the group deem acceptable according to corporategovernance rules and the preventive measures to mitigate the impact of any risks identifiedshould they materialize.

o Based on the information received from the person holding responsibility for tax affairs,informing the Board of Directors of the tax policies applied by the company and, in the case ofoperations and issues that have to be submitted to the Board of Directors’ approval, of their taxrepercussions when they constitute a relevant risk factor.

Ethics and Compliance Department: The Ethics and Compliance Department reports directly to theAudit and Compliance Committee of Gamesa Corporación Tecnológica, S.A.’s Board of Directors. Itsmain duty is to safeguard the application of the Code of Conduct and the Internal Rules of Conduct onthe Securities Markets, as well as to supervise the implementation and fulfillment of the CrimePrevention and anti-Fraud Policy, Program and Manuals across Grupo Gamesa.

Internal Auditing Department: Reports directly to the Board of Directors, on which it dependsthrough the Audit and Compliance Committee. This allows it to ensure the full independence of itsactions.

This department informs, advises and reports to the Audit and Compliance Committee in relation toany risks connected with the balance sheet and existing activities which identify, measure and controlthem. In order to do so, it carries out the annual internal auditing work plan and reports on theactivities performed under such plan and any incidents it has encountered.

Business Risk Control (BRC) Department: Reports to the Internal Auditing Department and takes partin setting the risk strategy and ensures the effectiveness and proper operation of the control systemswhich mitigate any risks detected. It also safeguards executive guidelines and assesses all aspectsconnected with the company’s risks, including operational, technology, legal, social, environmental,political and reputation-related risks.

Further information can be consulted in Section E of the Annual Corporate Governance Report (ACGR) 2016,especially Section E.2, which describes the group’s four levels of protection and defense to face and managerisks.



G4-46 Highest governance body’s role in reviewing the effectiveness of the organization’s risk managementprocesses for economic, environmental and social topics

These roles can be found in Section E “Risk Control and Management Systems” of the Corporate GovernanceReport 2016.

The following stand out as common/general control and supervision actions carried out throughout 2016which apply to significant risks:

Reports by the Business Risk Control Department to the Audit and Compliance Committee and theManagement Committee on the corporate risk map’s evolution and specific reports on significantrisks.

Appearances by executives before the Audit and Compliance Committee in 2016, which focused onthe supervision of control systems for specific and significant risks, including: financial (accountsreceivable, working capital), balance sheet, sales target coverage, services business unit, tax, legal,crime/fraud and exchange rate risks.

Control exercised by business unit and geographic area managers and the Management Committee’soversight of the evolution of risk maps and mitigation plans.

Internal audits conducted on some significant risks and submission of the corresponding reports tothe Management Committee and the Audit and Compliance Committee.

G4-47Frequency of the highest governance body’s review of economic, environmental and social impacts, risks,and opportunities

These roles can be found in Section E “Risk Control and Management Systems” of the Corporate GovernanceReport 2016. Supervision is conducted on at least a quarterly basis.

Highest governance body’s role in sustainability reporting

G4-48 Highest committee or position that formally reviews and approves the sustainability report

The Board of Directors of Gamesa is the body responsible for reviewing and approving this CorporateResponsibility Report 2016, which was approved prior to the General Shareholders’ Meeting’sannouncement.

Highest governance body’s role in evaluating economic, environmental and social performance

G4-49 Process for communicating critical concerns to the highest governance body

The process for communicating critical concerns to the highest governance body is set out in detail in sectionG4-43 (p. 68) contained herein. Please see said section.

G4-50 Critical concerns that were communicated to the highest governance body

The Board of Directors of Gamesa addresses the concerns which lie within its powers, as set forth in detail inArticle 7 of the Board of Directors Regulations. These concerns may be classified under the followingcategories:

The company’s general strategies and policies

Group of companies

General management

General Shareholders’ Meeting Organization and running

Annual accounts, transparency and veracity of reporting



Remuneration and incentives

G4-51Remuneration policies for the highest governance body and senior executives, as well as how they relateto economic, environmental and social performance

The company rules which govern the remuneration of members of the Board of Directors are set forth inArticle 45 of the Articles of Association and in Article 29 of the Board of Directors Regulations.

The Board of Directors’ remuneration shall be in keeping with market rates.

The remuneration of members of the Gamesa Board of Directors for their work as directors consists of afixed annual remuneration item of a certain amount (including, as appropriate, contributions to pensionschemes and the payment of life insurance premiums) for sitting on the Board and on the Executive, Auditand Compliance, Appointments and Remuneration Committees, along with an attendance allowance fortheir dedication and attendance at Board of Directors’ meetings and the meetings of the above-mentionedcommittees.

The remuneration received by the Chairman and Chief Executive Officer for performing his executive dutiesincludes the following items: fixed remuneration, annual variable remuneration items and medium/long-term variable remuneration items.

The annual variable remuneration item is benchmarked to the company’s and the group’s financial andactivity-related target attainment indicators. These indicators are set by the Board of Directors each year atthe Remuneration Committee’s proposal and are essentially based on the annual budget and marketguidelines for the year in course.

Other indicators having to do with sustainability performance (like occupational health and safety indicators),which are establish in general for all management personnel, are added to these business indicators.

The company’s Board of Directors approved a 2016-2017 incentive plan (the “Plan”) on February 22, 2017with two-fold aim in mind: (i) to give continuity to previous multi-year programs, considering that thecompany had not approved a long-term plan covering the period 2016 to 2017 to date given the negotiationsand evolution of the merger between Gamesa Corporación Tecnológica, S.A. and Siemens Holdco, S.L.Unipersonal (the “Merger”); (ii), to serve as an instrument to keep and retain key executives that are tocontribute to attaining the Merger’s goals.

The figure the aforementioned Plan’s indicator makes reference to is Grupo Gamesa’s absolute cumulativeEBIT during 2016 and the first quarter of 2017.

In general terms, the remuneration policy does not contemplate recurring contributions to pension schemes(pension plans) or contributions to social welfare schemes. However, pursuant to Article 45.2 of the Articlesof Association, a collective life insurance policy was taken out in 2014 for three (3) years, the beneficiaries ofwhich are all directors holding office, aside from the Chairman and Chief Executive Officer.

For further details, see the Consolidated Annual Accounts41 for 2016 on the website.

41http://www.gamesacorp.com/recursos/doc/accionistas-inversores/informacion-financiera/cuentas-anuales/cuentas-anuales-2016.pdf



G4-52Process for determining the remuneration of the highest governance body and senior executives, reportingwhether any independent consultants are involved

The Board of Directors’ remuneration is set in accordance with the Articles of Association approved by theGeneral Shareholders’ Meeting and with the Board of Directors Regulations approved by said body.

According to Article 29 of the Board of Directors Regulations, the Board shall determine the way andamounts in which the remuneration thus set shall be distributed among its members in each financial year,which may be done on an individual basis.

The remuneration amounts for each director for holding office are approved by the Board of Directors andare itemized in the Annual Director Remuneration Report, which is subject to a consultative vote at theGeneral Shareholders’ Meeting.

The company uses external consultants to determine the Board of Directors’ remuneration.

G4-53Report how stakeholders’ views and expectations are sought and taken into account regardingremuneration policies

The company’s General Shareholders’ Meeting submits the Annual Director Remuneration Report to aconsultative vote on an annual basis. In accordance with prevailing legislation contained in the CorporateEnterprises Act and 4/2013 National Securities Commission Circular, as amended by Circular 7/2015, theremuneration policy of the year in course and the preceding year is set out in detail, including each director’sindividual remuneration.

Said report was approved with 95.87% of the votes in favor, 3.22% votes against and 0.91% abstentions atthe company’s General Shareholders’ Meeting held on June 22, 201642.

G4-54 Ratio of the annual total compensation for the organization’s highest-paid individual to the median annualtotal compensation

In order to calculate the ratio of the annual total compensation to the median annual total compensation,the data of all employees – except executives – in countries where significant operations are carried out wastaken:

Table 45.- Ratio of the annual total compensation for the organization’s highest-paid individual to median annual totalcompensation

Spain China Brazil USA India Mexico

2014 3:1 6:1 3:1 3:1 10:1 -2015 3:1 8:1 4:1 4:1 10:1 3:12016 3:1 8:1 7:1 3:1 12:1 (*) 3:1

G4-55Ratio of percentage increase in annual total compensation for the organization’s highest-paid individual tothe median percentage increase in annual total compensation

In order to calculate the ratio of percentage increase in annual total compensation to the percentageincrease in median annual total compensation, the data of all employees – except executives – in countrieswhere significant operations are carried out was taken:

Table 46.- Ratio of percentage increase in annual total compensation for the organization’s highest-paid individual to themedian percentage increase in annual total compensation (in percentage points)

Spain China Brazil USA India Mexico

2014 -2.32 p.p. -1.33 p.p. -1.32 p.p. -2.62 p.p. -0.00 p.p. -2015 0 p.p. -0.89 p.p. -20.84 p.p. -0.78 p.p. 45.2 p.p. -11.32 p.p.2016 1.50 p.p. (*) -0.66 p.p. 2.33 p.p. 1.50 p.p. 1.92 p.p. -0.71 p.p.

(*) A percentage increase of 2.5% was accumulated in 2016 (1% that not was applied in 2015 and 1.5% applied in 2016).

42See link: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-corporativo/junta-general-

accionistas/documentacion-2016/desarrollo-de-la-jga-2016.pdf

CORPORATE RESPONSIBILITY REPORT 2016 | PART I. GENERAL DISCLOSURESSection I.07 - ETHICS AND INTEGRITY


I.07.- ETHICS AND INTEGRITY

G4-56 Description of the organization’s values, principles, standards and norms of behavior such as codes ofconduct and codes of ethics

Values

Furthermore, Gamesa considers the following as attitudes for success which must accompany the attainmentof said values: i) leadership; ii) a global company; and iii) being customer-driven.

Gamesa’s corporate principles and values apply across the entire company in all its different regions and toall the businesses which comprise it.

Policies and principles

These corporate values, as well as the Corporate Social Responsibility Policy43, are reflected in the GamesaCode of Conduct44 and govern the conduct of the companies making up Gamesa. They also govern people inthe performance of their duties and work, as well as in their commercial and professional relationships inorder to consolidate universally accepted corporate ethics.

The latest version of the Code of Conduct (revised periodically since its first edition in 2005) was approved bythe Board of Directors: of Gamesa Corporación Tecnológica, S.A. on April 5, 2016. It is placed at the disposalof employees on hard copy and also on the website and intranet, along with other important internal andexternal rules (like, for instance, the Crime Prevention and Anti-Fraud Policy, crime prevention and anti-fraudmanuals, the Prevention of Conflicts of Interest Regulation, etc.) and other new aspects of the company’sethics and compliance model. The Code is also circulated and placed at the disposal of employees by postingit on bulletin boards and explanatory chats on it are given to workers without a corporate intranetconnection.

The Board of Directors of Gamesa Corporación Tecnológica, S.A. has approved different corporate policiesgeared at ethical business behavior in keeping with the principles and values mentioned above45.

In 2016, the Ethics and Compliance Department also drew up, reviewed and approved important internalregulations aimed at not only preventing, detecting and reacting against possible crimes, but also preventingand controlling other kinds of fraud, administrative infringements and serious irregularities (regulations onthe Whistleblowing Channel, disciplinary proceedings, the prevention of conflicts of interest, crimeprevention and anti-fraud manuals for the main Spanish and Italian subsidiaries of the group, along withupdating the risk maps and crime controls for Italy, India, China, Mexico, Brazil and the USA).

43http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-corporativo/politicas-corporativas/politica-de-rsc.pdf

44http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-corporativo/reglamentos-estatutos/codigo-conducta.pdf

45See Table 55.- List of corporate policies,

We aspire to the highestquality, efficiency,productivity and excellencestandards when designingour products, services andsolutions.

We are committed toexcellence regardless of the

requirements it demands.

Excellence

We value the contributionsof each person and respecttheir differences.

We behave fairly,transparently and honestlyin all interactions in orderto build trust in ourrelationships.

We are concerned aboutand support each other,respecting our differencesand valuing what we can

learn from one another.

RespectTeamwork

We make an effort toachieve new goals. Wealways look for new andcreative ways to meet ourcustomers' challenges.

We are among therenewable energy sector'sleaders and we make a realeffort to maintain ouradvanced positionregarding new and dynamictechnologies.

In order to maintainleadership, we alwaysadapt. We are flexible andagile in the way we meet

new challenges.

Innovation

We satisfy today's needswithout compromisingtomorrow.

Our short and long-termobjectives take intoaccount our customers,stakeholders and society asa whole.

Sustainability

We believe that the wholeis greater than the sum ofits parts.

We work as a team, jointlysharing challenges and

solutions.

CORPORATE VALUES



The Code of Conduct has been reviewed periodically since the first edition was published in 2005, being thenew review approved by the Board of Directors in 2016. It is placed at the disposal of employees via theInternet and the intranet, along with the main changes and scope of some of the rules. It is also posted onbulletin boards and explanatory chats on it are given to workers lacking a corporate intranet connection.

Table 47.- List of corporate policies (available on the corporate website)

Corporate Governance Policy Senior Executive Charter General Risk Control andManagement Policy

Communications policy and contacts withshareholders, institutional investors andvoting consultants

Auditor of Accounts EngagementPolicy

Overall Corporate SocialResponsibility Policy

Shareholder Remuneration Policy Crime Prevention and Anti-FraudPolicy

Diversity and Inclusion Policy

Policy Grupo Gamesa’s Definition andCoordination and Bases of the CorporateOrganizational Structure

Corporate Tax Policy Supplier, Contractor andCollaborator Contracting andRelationship Policy

Director Recruitment Policy Investment and Financing Policy Policy Against Climate Change

Director Remuneration Policy

Gamesa and the United Nations Global Compact

Gamesa endorsed the United Nations Global Compact on February 2, 2005 (participant ID 4098) and ratifiedits commitment to support the Compact’s ten principles for yet another year.

The management mechanisms implemented and the progress made over the year with regard to theseprinciples are set out throughout this report and briefly explained in the table below:

Fig 23.- The United Nations Global Compact’s ten principles

Hu

man

righ

ts Principle 1:Businesses shouldsupport and respectthe protection ofinternationallyproclaimed humanrights within theirarea of influence.

Principle 2:Businesses shouldmake sure that theyare not complicit inhuman rights abuses.

Lab

or Principle 3: Businesses

should uphold thefreedom of associationand the effectiverecognition of the rightto collectivebargaining.

Principle 4: Businessesshould uphold theelimination of all formsof forced andcompulsory labor.

Principle 5: Businessesshould uphold theeffective abolition ofchild labor.

Principle 6: Businessesshould uphold theelimination ofdiscrimination inrespect of employmentand occupation.

Envi

ron

men

t Principle 7:Businesses shouldsupport aprecautionaryapproach toenvironmentalchallenges.

Principle 8:Businesses shouldundertake initiativesto promote greaterenvironmentalresponsibility.

Principle 9:Businesses shouldencourage thedevelopment anddiffusion ofenvironmentallyfriendly technologies

Principle 10:Businessesshould workagainstcorruption inall its forms,includingextortion andbribery.A

nti

-Co

rru

pti

on



Table 48.- Progress report on compliance with the Global Compact’s principles

Principle Policies and systems implemented Significant progress made

Principle 1Principle 2Principle 3Principle 4Principle 5

Support and respect for human rights. Adoption of a CorporateSocial Responsibility Policy.Section I.07 Ethics and integrity (p. 75)

The company has had a formal Corporate Social Responsibility Policysince 2008, which complies with the provisions set forth in Article19.1 of the Articles of Association and with Articles 5 and 39 of theBoard of Directors Regulations. As a result, the 2015-2017 CorporateSocial Responsibility Master Plan is being drawn up.(p. 10)

112 training sessions given to over 2,400 Professionals in EMEA(Spain and Italy), Brazil, USA and Mexico on the Code of Conduct,conflict of interest prevention rule, the crime prevention and anti-fraud model and the Whistleblowing Channel.Section I.07 Ethicsand integrity (p. 75)

Implementation of the Occupational Health and Safety Plan through99 full audits conducted, 967 specific training actions onoccupational health and safety, 3,482 improvement actions onhealth and safety, 10,463 safety inspections and 4,380 preventiveobservations and 96.6% compliance in health screening check-ups.”Occupational Health and Safety” section (p. 121)

Supply base of more over 9,900 suppliers and procurement volumeexceeding €3.7 billion create jobs and local wealth. Human rightscompliance processes in the supply chain. Section G4-12 (p.34and the following)

Community actions and programs in Mexico, Brazil, Uruguay andIndia aimed at covering basic educational needs and access to otherdecent conditions.Section G4-SO2 (p. 145)

Commitment made to workers to defend human and labor rights bymeans of a Global Collective Agreement. 307 meetings with workson the defense of workers’ rights”Labor/Management Relations”section (p.120 )

Undertakings in equality and diversity matters.”Equality andDiversity” section (p. 131 )

Support and respect for human rights. Adoption of Code ofConduct’s valuesSection I.07 Ethics and integrity (p. 75)

Commitment to human rights, the fight against child labor andforced labor.”Child labor” and “Forced labor” sections (p. 140)

Economic, social and environmental performance supervisionmechanisms establishedSection G4-43 (p. 68) and the following.

Priority given to occupational health and safety of employees”Occupational health and safety” (p.121)

Justice and equity. Employees treated with respect andremunerated in a fair and equitable way.”Diversity and equal opportunities” section (p. 131 and thefollowing)

Labor conditions are given priority in talent management andappropriate training given to people.”Training and education” section (p.128)

Responsible management of the global supply chain.SectionG4-12 (p. 34 and the following)

Protection and defense of human rights in the communitieswhere Gamesa has a presence.Section II.11B Human Rights (p.137)

Corporate safety practices which set out the defense of humanrights.”Safety measures” section on p.140

Defense of the freedom of association and collective bargaining.”Freedom of association and collective bargaining” section onp.139

Principle 6 Gamesa does not tolerate discrimination and seeks to develop afavorable framework for labor relations based on the equalopportunities. This stance is set out in the Diversity and InclusionPolicy, the Corporate Social Responsibility Policy and in Section 3.3of the Code of Conduct

”Diversity and equal opportunities” section (p. 131 and thefollowing)

The percentage of women in the workforce at the end of 2016amounted to 18% (1,687) and remained steady when compared toprevious years. The total number of people in the workforcesuffering a disability exceeding 33% amounted to 29. People agedabove 40 years are the most numerous in the workforce (2,444.26;26%), followed by employees aged between 31-35 years (2,172;23%), employees aged between 36-40 years accounted for 21%,those between 25-30 years for 20% and finally employees aged lessthan 25 years (9%). Spaniards are a majority at Gamesa, accountingfor 44% of the workforce, followed by Indians (30%) and Chinese

(7%).”Diversity and equal opportunities” section (p. 131 and thefollowing)

Principle 7 Responsibility for protecting the environment in wind turbinedesign and manufacturing processes by applying managementrequirements in accordance with the ISO 14.001 standard andother environmental standards which apply.Section II.10 Environmental Dimension (p. 93 and the following)

ISO 14.001 certified product.

Ecodesign ISO 14006 certification for G128-4.5 MW turbine

Ecodesign ISO 14006 certification for G114-2.0 MW turbine

Greenhouse gas emissions verified according to ISO 14064.

Life cycle assessment (LCA) on the G90 platform in accordance withthe UNE-EN ISO 14.040 and 14.044 standards.

Environmental Product Declaration(EPD) obtained for Gamesa G90-2.0 MW, G114-2.0 MW, G128-5.0 MW and G132-5.0 MWturbinesSection G4-EN28 (p. 113)

Principle 8 Commitment to researching and developing environmentallyfriendly products that produce long-term environmental benefits.”Products and services” section (p.113)

€66 million invested in R&D activities in 2016 and patent portfolio of518 patents. 905,000 technology personnel man-hours, 555employees.”Investing in Innovation” section (p. 87)

Participation in wind energy research projects.”Economicperformance” section (p. 87)

Principle 9 Gamesa employs and distributes clean energy. It is committed toenvironmentally exceptional technologies which allow the use offinite resources to be reduced and existing resources to be usedmore efficiently.Section G4-2 (p. 7) and G4-4 (p. 21)

An environmental portfolio amounting to 38.8 GW installed for ourcustomers which avoid the emission into the atmosphere of 58million tons of CO2 a year.Section G4-2 (p. 7)

Principle 10 Gamesa makes sure its activity is based on respect for the Law andon the fight against corruption in all its forms. This stance is set outin the Corporate Social Responsibility Policy and in the section 3.7of the Code of Conduct.”Fight against corruption” section (p. 147 and the following)

Whistleblowing Channel available on the intranet, the website andby post, as well as a system of rights, duties, guarantees, conditionsof access and use thereof by users.Section G4-58 (p. 79)

No reports on behavior that supposedly breaches the Code ofConduct’s provisions on anti-corruption matters were received in2015.Section G4-5 (p. 148)



G4-57 Internal and external mechanisms for seeking advice on ethical and lawful behavior

The Ethics and Compliance Department aims to promote the dissemination, awareness and fulfillment of theCode of Conduct and foster a prevention culture based on the principle of zero tolerance concerning illegalacts and fraud in accordance with the provisions set forth in the Crime Prevention and Anti-Fraud Policy. Thispolicy makes it easier to exercise oversight of the fulfillment of legal requirements set forth in different kindsof legislation, including: corporate-civil, wind energy business, customs, competition, intellectual andindustrial property, labor, health and safety, environmental, transport, products and materials, securitiesmarket, data protection and asset security, taxation and accounting legislation.

The Ethics and Compliance Department carried out several initiatives in 2016 aimed at fostering theestablishment of an ethical culture in the group, which included the following:

a) A new space on the corporate intranet (accessed directly from the home page) through which saidDepartment makes accessing the Whistleblowing Channel easier and places essential documents andinformation on ethical behavior at Gamesa at the disposal of the group’s professionals.

b) The Department gave 112 training sessions to over 2,400 Professionals in EMEA (Spain and Italy), Brazil,USA and Mexico on the Code of Conduct, conflict of interest prevention rule, the crime prevention andanti-fraud model and the Whistleblowing Channel, along with specific training to several executives onthe Internal Securities Market Regulation.

c) Each attendant was handed a copy of: i) the Code of Conduct; ii) the Rule on the Prevention of Conflictsof Interest; iii) an informative leaflet that set out the pillars upon which the group’s business ethicsculture is based; and (iv) a card which describes in detail the different reporting channels for any illegalor irregular behavior. Taking advantage of these sessions, the Ethics and Compliance Department askedthe attendants to provide their Conflict of Interest Declarations and issued acknowledgments of receiptfor the documents handed over.

d) The department distributed and hung posters carrying the slogan “YOUR commitment, our commitment,OUR ethics, your ethics” and Styrofoam billboards expressing the commitments made by signatories ofthe Code of Conduct and the Crime Prevention and Anti-Fraud Policy.

e) It posted different news items of the intranet (for instance, a news item headlined “Gamesa approvesnew review of the Code of Conduct”; “The Ethics and Compliance Department opens new space on theIntranet” when the new Ethics and Compliance Department was inaugurated; and “Our aim is tointegrate ethics and compliance daily” to celebrate international anti-corruption day).

f) It contributed/participated in several events organized by public and private organizations like theUniversity of Castilla-La Mancha, the National Compliance Congress, Legal Today, etc. It also took part intraining programs led by Transparency International under the TI-E Integrity Project/Siemens IntegrityInitiative through which the Ethics and Compliance Department was granted an Expert in CorporateIntegrity, Transparency and Good Governance Diploma issued by Transparency International (the rest ofthe people which form part of the Ethics and Compliance Department are expected to obtain the samecertificate in 2017).

This department appears before the Audit and Compliance Committee on a half-yearly basis (in July andSeptember) to report on the degree of compliance and the actions it has performed in connection with theCode of Conduct and the Internal Rules of Conduct Regarding the Securities Markets during the relevantperiod, as well as on the department’s action plan.

In addition, the Ethics and Compliance Manager attended several Audit and Compliance Committee meetingsin 2016 as an invited guest to provide said committee with advice on matters related with his duties thatcould come up during said meetings.



G4-58 Internal and external mechanisms for reporting concerns about unethical or unlawful behavior, andmatters related to organizational integrity

Whistleblowing Channel: Pursuant to the provisions contained in the Gamesa Code of Conduct and in Article10(g) of the Gamesa Audit and Compliance Committee Regulations, the company places at the disposal ofGamesa and Grupo Gamesa employees a mechanism (Whistleblowing Channel) which allows them (and thirdparties) to report (anonymously in any jurisdictions where it is so required) any potentially significantirregularities concerning the Code of Conduct, the Internal Rules of Conduct Regarding the Securities Marketsand the Crime Prevention and Anti-Fraud Manual and Policy, along with any other presumably criminal,fraudulent or irregular actions they may become aware of within the group, regardless of how these aredefined or their amount. Users can access the Whistleblowing Channel and file their accusations before theEthics and Compliance Department through the corporate intranet, the corporate website, by post or at thetelephone extension made available for such purpose, without detriment to the possibility of filing therelevant accusation in person before the Ethics and Compliance Department.

Gamesa employees can likewise use these means to address any doubts that may arise concerning theinterpretation and/or application of the Code of Conduct, as well as to ask questions or make anysuggestions and proposals concerning the Code of Conduct and the Crime Prevention and Anti-Fraud Policyand manuals. The rules on the Whistleblowing Channel’s operation (updated in 2016) are publicly availableand can be accessed on the corporate website46 or the corporate intranet.

Code of Conduct: A breach of the Code of Conduct by professionals could give rise to infringements laiddown in legal, corporate and labor legislation. According to Section 5 of the Code of Conduct (“Breaches andInfringements”), should a professional be aware or have reasonable suspicions of illegal actions or breachesof the Code of Conduct, they are obliged to report the breach by any of the channels made available to do so,including: a) through a written accusation addressed to the Chairman of the Audit and ComplianceCommittee, which shall be brought before the Ethics and Compliance Department; b) through a writtenaccusation addressed to the Ethics and Compliance Department, which can be sent to said department’s e-mail address; and c) through the Whistleblowing Channel, which is available on the website and the intranet.

Action protocol in the event of workplace harassment: The reporting procedure included in the harassmentaction protocol allows the person suffering harassment or a third party aware of the sexual or psychologicalharassment to trigger the protocol. In order to do so, a Whistleblowing Channel associated to the SexualHarassment Prevention Protocol has been established for Europe and Asia, which may be used in cases ofsexual harassment or mobbing. Said protocol is managed by the Harassment Prevention Committee and theEthics and Compliance Department forms an integral part of it.

Table 49.- Number of accusations received by the Ethics and Compliance Department

2016 2015 2014 2013 2012

EMEA 9 3 5 4 0USA 1 0 0 0 0APAC 2 0 0 0 0INDIA 0 1 0 1 0BRAZIL 4 3 0 0 0LATAM 3 4 0 0 0

Total 19 11 5 5 0

46http://www.gamesacorp.com/es/pages/pdf/es/canalDenuncia.pdf



Nineteen notifications were received through the mechanisms put into place for such purpose in 2016, whichcorresponded to accusations about behavior connected with the Code of Conduct’s rules and/or the crimeprevention and anti-fraud model’s rules. The reports issued as part of the investigation process include:recommendations intended to prevent, as appropriate, similar situations from taking place in the future.

Furthermore, should the Ethics and Compliance Department detect a breach of the legislation which applies,the Manual or the Code of Conduct’s rules which are specifically targeted at Grupo Gamesa’s professionals,the records are brought before the Human Resources Department so that it may impose disciplinarymeasures in accordance with the penalties and sanctions scheme laid down by any collective bargainingagreements which apply and prevailing employment legislation.

Changes in the procedures to improve controls, improved clauses in contracts with third parties andbackground checks are among the most noteworthy measures taken in 2016.

CORPORATE RESPONSIBILITY REPORT 2016 | PART II. SPECIFIC STANDARD DISCLOSURES


PART II: Specific Standard Disclosures

CORPORATE RESPONSIBILITY REPORT 2016 | PART II. SPECIFIC STANDARD DISCLOSURESSection II.08 – GENERAL MANAGEMENT APPROACH


II.08.- MANAGEMENT APPROACH

This section provides a description of the material aspects affecting Gamesa, which have been defined according tothe criterion set out under indicator G4-19 of this report. The approach the company takes to properly manage eachaspect is described and the results achieved are reported through the corresponding indicators. Where several ofthese aspects are managed with similar approaches, said approach is described for one them and the relevantcross-reference is made in the others. There are also general company-wide tools, processes and procedures for themanagement of the material aspects identified. These are applied to all the said aspects and described below. Theyshould be taken into account to understand the way in which Gamesa performs its activities and manages itseconomic, environmental and social impacts.

G4-DMA Management approach applicable to all the report’s aspects

Policies and commitments

The company’s corporate governance system is comprised of the Articles of Association, its corporatepolicies, internal rules of corporate governance and the other internal codes and procedures that aredescribed in detail on the group’s corporate website47.

Thus, Gamesa has equipped itself with a set of corporate policies that implement the principles reflectedin the corporate governance system and contain the guidelines which govern the company’s actions andthose of the companies belonging to its group, along with the actions of its directors, executives andemployees under the framework of the company’s strategic plan and vision and values.

In addition, Gamesa has made certain public commitments which guide the group’s actions:

Through endorsing a variety of initiatives connected with it activity’s environmental and socialdimensions, which are listed in the section on indicator G4-15 herein.

Through its membership of certain business or social associations, like the ones described insection G4-16 of this report, and identifying itself with their objectives and goals.

Responsibilities

Indicators G4-34 a G4-36 of this report describe the group’s organizational model and responsibilitiesstructured according to their broadest level. Moreover, the responsibilities which the corporate areas orbusiness units have regarding the different aspects dealt with in this document can be summed up asfollows:

Aspects having to do with corporate governance and aspects having a legal scope are theresponsibility of the General Counsel’s Office and the Board of Directors.

Aspects connected with labor practices are the responsibility of the Human ResourcesDepartment, which forms part of the General Executive Management Department.

Aspects related to safety, health and the environment are the responsibility of the Quality, Safetyand Environmental Department, which reports to the Industrial Department.

Aspects connected with procurement are the responsibility of the Procurement Department,which forms part of the General Executive Management Department.

Aspects having to do with public policies are the responsibility of the General CorporateDepartment.

Aspects related to products and customers are the responsibility of the Sales Department.

Aspects related to production facilities are the responsibility of the Industrial Department.

Additionally:

47http://www.gamesacorp.com/es/accionistas-inversores/gobierno-corporativo/

CORPORATE RESPONSIBILITY REPORT 2016 | PART II. SPECIFIC STANDARD DISCLOSURESSection II.08 – GENERAL MANAGEMENT APPROACH


The Management Committee (comprised of the Executive Chairman, the Executive GeneralManager, the Chief Corporate Executive Officer, the Legal Counsel, the Chief Financial Officer andthe Chief Business Development Officer) constitutes an internal technical support, reporting andmanagement committee for the roles of defining, supervising, organizing and monitoring generalmanagement guidelines and the businesses’ strategic planning.

The Ethics and Compliance Department is in charge of the Ethical Code, the Crime Prevention andAnti-Fraud Policy, the Internal Rules of Conduct Regarding the Securities Market and any others itmay be assigned with by the company’s Board of Directors or by the corporate governancesystem.

In order to exercise these responsibilities, the Gamesa model sets forth that such responsibilities must beassumed in a decentralized way by the parent companies of the businesses in each region. These areorganized through their respective boards of directors, which deal with the effective management ofeach of the businesses, as well as with their day-to-day management and control.

Objectives, resources and results

Gamesa publicly discloses its medium and long-term objectives periodically, using different ways to doso.

Internally, the different businesses and corporate organizations set their annual targets according to thegroup’s financial and non-financial strategic objectives aimed specifically at the activities under theirresponsibility. The results obtained in relation to the targets set serve to establish the annual variableremuneration of the company’s management team.

In order to attain these targets, Gamesa is equipped with an annual resource allocation process, whichallocates the corresponding budgets. The achievements Gamesa has obtained are reflected in thedifferent quantitative indicators’ evolution for the different aspects dealt with in this report.

CORPORATE RESPONSIBILITY REPORT 2016 | PART II. SPECIFIC STANDARD DISCLOSURESSection II.09 – ECONOMIC DIMENSION


II.09.- ECONOMIC DIMENSION

Economic performance

G4-DMA Management approach

Business Plan’s results

Gamesa ended 2016 with some outstanding results in a stable demand environment. It reached a recordfigures for order placements, sales and profitability that exceeded the targets set forth for the year, whichwere readjusted upwards twice over the course of the year.

Main consolidated figures 2016:

Sales: €4.612 billion (+ 31.6% y/y)

EBIT: €477 million (+ 47.9% y/y)

Net Profit: €301 million (+ 77.0% y/y)

NFD (cash): € (682) million48

MWe sold: 4,332 MWe (+36.2% y/y)

Firm order placements: 4,687 MW (+20.7% vs. 2015)49

Gamesa’s complete economic results for the financial year are summed up in the annual financial statementsfor 201650, which are available at www.gamesacorp.com.

In addition to these results, the company also requires its subsidiaries to explain how they were achieved andtheir assessment in terms of sustainability. In the case of Gamesa, this integrated view can be obtained byconsulting this Corporate Responsibility Report 2016, along with the aforementioned financial information.

Stock market evolution. Balance for the year

Gamesa shares rose by 21.8% in 2016, greatly exceeding the wind power industry’s rise, which ended theyear in negative figures, and the IBEX 35. The share price reached its peak (€21.77) on September 22, whilelowest value was reached at beginning of the year, January 21(€13.78). The largest daily variation (+18.8%)took place on January 29 and was related to the first news on a possible merger agreement between Gamesaand Siemens Wind Power breaking out in the press. The share price’s evolution in 2016 was linked to fourkey events: the merger between Gamesa and Siemens Wind Power, the presentation of the results for 2015and the announcement of the guidelines for 2016, the disclosure of the first half-year results containing asupward adjustment of the targets set for 2016 and the disclosure of the 9M 2016 results containing a secondupward adjustment of the year’s targets.

48Net financial borrowing construed as financial debt, including subsidized loans, derivative Instruments and other current financial liabilities

minus other current financial assets and cash and bank.49

Firm orders and framework agreement confirmation for delivery in the current and future years. Includes orders signed in 4Q 2016 (731

MW) and published separately 1T 2017.50

http://www.gamesacorp.com/recursos/doc/accionistas-inversores/informacion-financiera/resultados-trimestrales/2015/2015-

presentacion-anual-de-resultados.pdf



The first quarter of the year began with a great deal of volatility in the wind turbine manufacturing sector’sstock market evolution, similar to the volatility seen in 2015. There were more falls in share prices than risesin the sector. This volatile negative trend extended beyond the sector to the variable-income securitiesmarket in general and was due to an environment affected by several risk factors: a crisis in raw materialsand especially the low price of oil, a slowdown in growth in China, a limited recovery in Europe and doubtswhether the ECB’s monetary policies would have a real impact on the economy. These factors were added tothe political uncertainty affecting certain markets like Spain and United Kingdom.

A key event temporarily removed the evolution of Gamesa’s share price from this negative trend on January29, when the first news on a possible merger agreement with Siemens Wind Power broke out. This newsresulted in the highest daily rise in the share price amounting to 18.8%. After the first news pieces werepublished, which were then confirmed by the company, the evolution in the share price fell back to itsprevious trend in keeping with the rest of the sector, but not to its lowest point, until the 2015 results weredisclosed. As in previous years, the complete year’s results were accompanied by the disclosure of theguidelines for 2016. Both –the results and the guidelines – were received very positively by the market with adaily rise of 5.8% after their disclosure.

The results for 2015 exceeded the sector’s expectations with sales growth amounting to 23% and a rise inEBIT of 8.4%, 1.7 percentage points above the EBIT margin for 2014, excluding the positive impact of thecapital gains resulting from the incorporation of Adwen, a joint venture with Areva to operate in the offshoresector. Net profit grew by 85% and the working capital balance fell to reach €12 million, equivalent to 0.3%of sales in the year. Said profitable growth and the control over working capital and investment allowedGamesa to end the year with a net cash and bank position in the balance sheet of €301 million – €157millionabove the position for 2014 – and maintain the dividend distribution policy of 25% of the net profit earned in2015. Along with the results for 2015, which beat expectations, the targets set for 2016 forecastextraordinary performance in the year with a growth in sales of almost 20% and an EBIT margin equivalent toor greater than 9%. This not only meant bringing fulfillment of the Business Plan 2015-2017 forward by acomplete year, but also improving the targets set for 2017.

Mirroring these events, the share price rose by 10% (€17.36) at the end of March with respect of the price atthe 2015 year-end.

The year’s most relevant events took place during the second quarter. These consisted of the signing andannouncement of the merger agreement with Siemens Wind Power on June 17. The market’s reaction to theannouncement was relatively modest, with a rise of 5.6% on the date of the announcement, since thenegotiations had been carried out with the market’s knowledge. The merger agreement with Siemens WindPower will allow one of the industry’s leading companies to be created, with a sales volume and order bookthat will position the company as number one in the market. Both companies’ diversification andcomplementarity nature, the scale of the new group, its global scope and its presence in the industrialsegments and geographic markets currently undergoing the highest growth rates will enable the mergedentity to maintain the creation of value through profitable growth in the future. The new group’s larger scalewill help it to maximize growth opportunities and resist demand troughs in an increasingly competitiveindustrial environment characterized by a change in electricity producers’ business model from subsidizedsystems to competitive auctions.

The year’s first quarter results were also disclosed in the second quarter. These were in line with theguidelines set in February. Sales in the quarter rose by 30% y/y and the operating result grew by 80% toreach a margin of 11.1%. In addition to the first quarter’s outstanding economic and financial performance,the sales area’s robustness is well worth pointing out. A total of 1,031 MW of orders were placed, a 26%increase on the sales volume signed in the first quarter of 2015.

During the second quarter, the General Shareholders’ Meeting was also held. It approved the dividend share-out charged to 2015.

Thus, Gamesa ended the second quarter with an increase of its share price amounting to 1.9% (€17.70) inrelation to the end of March and a total rise of 11.9% in relation to the beginning of the year.



The price of Gamesa shares reached its highest value (€21.77) in the third quarter, more specifically onSeptember 21. It was also the quarter with the highest rise in the share price, which amounted to 20.5% fromthe end of June, despite it being the quarter in which the Brexit referendum held on June 30 confirmed theUnited Kingdom’s exit from the European Union and the consequent volatility this event caused in themarkets.

The second quarter results for 2016 were disclosed during the quarter. Due to their robustness, these resultsforced the company to increase the targets it had initially set for the year. A 33% growth in sales on the sameperiod in the preceding year was recorded and the recurrent EBIT margin rose by more than two percentagepoints to stand at 10.5%. Furthermore, order placement during the second quarter of the year revealed thesales area’s robustness. A total of 1,180 MW of orders were placed, 16% more than the orders placed in thesame period of 2015. All this led to the company raising the sales volume forecast for the year from the 19%it had initially forecast to 26%. The EBIT margin forecast was also raised from a minimum of 9% to aminimum of 9.5%, which amounts to absolute EBIT growth of 47% on recurrent EBIT in 2015.

Gamesa proceeded to pay out the dividend charged to the 2015 results in July, which totaled €42.6 million.

Part of the significant increase seen in the third quarter was reversed in the fourth quarter. The share pricefell by 9.6% and ended the year with an annual rise of 21.8%. This correction took place in a marketenvironment that was placing the sustainability of demand growth into doubt and despite the fact thatseveral relevant milestones had been achieved towards the approval of the merger agreement with SiemensWind Power. The nine-month results were also disclosed, the strength of which forced Gamesa to once moreincrease the targets it had set for the year.

A far as the merger with Siemens Wind Power is concerned, an Extraordinary General Shareholders’ Meetingwas held in the fourth quarter, which resolved to approve the agreement with 99.75% of the share capital inattendance voting in favor. As regards the nine-month results, Gamesa ended the first nine months of theyear with an annual growth rate of 32% and improved recurrent operating profit by 2.0 percentage points toreach an operating margin of 10.2%. Lastly, concerning the company’s sales strength, Gamesa ended thethird quarter with an order placement figure of 1,090 MW, 8% more than the orders placed in the thirdquarter of 2015. The placement of orders during the last twelve months rose to reach 4,343 MW. The salesarea’s robustness and the company’s performance during the first nine months of the year forced Gamesa toraise its guidelines once again. The sales volume forecast was increased by 35% and the EBIT margin targetwas raised to 10%, equivalent to a 56% EBIT growth rate in absolute terms. The company’s strength in saleswill allow Gamesa to be ranked fourth for the second time among the world’s turbine manufacturers in 2016by increasing its market share by two percentage points to reach 7%.

We can therefore conclude that the share price’s evolution in 2016, which rose by 21.8% in an environmentwhere turbine manufacturers lost value, is a reflection of the outstanding results seen in 2016, the fact thatthe company’s profitable growth targets for the year were raised twice, the sales area’s robustness,Gamesa’s competitive positioning and, above all, the merger agreement with Siemens Wind Power, whichwill allow one of the sectors leading companies to be created.

Fig 24.- Comparative listing - Gamesa vs. IBEX35 Fig 25.- Evolution of Gamesa’s listing 2016

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Table 50.- Key stock market indicators

2016 2015 2014 2013 2012

Share capital (€) 47,475,694 47,475,694 47,475,694 43,159,722 43,159,722

No. of shares 279,268,787 279,268,787 279,268,787 253,880,717 253,880,717

Stock market capitalization (€) 5,381,509,525 4,418,032,210 2,110,992,761 1,924,415,835 421,441,990

Free float (%) 74.00 75.04 71.40 69.04 72.33

Highest listing (€) 21.77 16.63 9.88 7.59 3.24

Lowest listing (€) 13.78 7.42 6.79 1.62 1.01

Average listing (€) 18.21 13.00 8.34 4.53 1.91

Listing at 12/31 (€) 19.27 15.82 7.56 7.58 1.66

Total no. of shares traded 632,734,560 736,176,947 936,326,608 595,771,545 828,363,068

Average no. of shares traded daily 2,462,002 2,875,691 3,671,869 2,336,359 3,235,793

Earnings (Loss) per share (€) 1.0887 0.6164 0.3550 0.1796 (2.63)

Investing in Innovation

Gamesa views R&D and innovation as key elements for its future development and its internationalpositioning in the industry. The main aim of the group’s R&D and innovation activities is to reduce windenergy generating costs in order to improve its competitiveness against other generation sources, since it isessential to optimize the electricity system’s overall costs.

In order to achieve this goal, the group has three R&D centers located in Pamplona, Madrid and Zamudio inSpain, as well as engineering teams based on in India, China, Asia Pacific, North America, Latam and Brazil,while investing a total of 905,000 technology personnel man-hours, which is equivalent to 555 people.

Innovation is one of Gamesa’s strategic driving forces and a key element in its business model, since itprovides a competitive edge. It is also a pillar of its development and positioning in the wind energy industry.Gamesa views innovation as a cross-cutting element affecting the entire organization and applies it not onlyto its products and services, but also to its processes by integrating it across the entire value chain, including:design, logistics, assembly, construction and wind turbine operations and maintenance. This is done toreduce wind energy generating costs in order to improve its competitiveness against other energy sources.

The company’s main innovation efforts are made through the products it designs. To achieve this, it has amedium-term technology strategy in place which includes the key innovations on which its technologydevelopment efforts are focused. These are then materialized and deployed through annual managementplans on a set of R&D and innovation projects. These plans’ development ranges from the research stageright up to the product’s development, industrialization, continuous improvement and maintenance.

The Strategic Technology Plan 2015-2017 accompanies the company’s Business Plan for the same period andsets the main lines of Gamesa’s three main areas of innovation:

Development of wind new turbines;

Continuous improvement projects on already existing products; and

Products and services for the operations and maintenance stage.

With this aim in mind, Gamesa allocated investments totaling almost €211 million in the last three years,amounting to an average of 1.9% of total sales.

Technological product innovation

The body holding responsibility for innovation at Gamesa is the Executive Product Strategy Committee, whichdetermines innovation, new products and related innovations that will developed by the company. Thiscommittee is made up of the managers of the company’s main business areas (Technology, Sales, Industrial,Procurement and Services Areas), the Executive General Manager and the regions’ CEOs, who make an effortto give a strategic response to each market’s needs in the form of products and determine the industrialresources needed. In the 2015-2017 Plan envisages the launch of a new 3.3 MW platform and the adaptation2.5 MW turbines to the Indian and Brazilian markets.

Once the new launches have been determined, another committee called the Product Strategy Committee isin charge of deciding on the future product’s configuration or configurations based on the varioustechnologies with which each new wind turbine or variant can be equipped.



Pure innovation

This plan also determined the applied innovations which can provide the company with advantages bycreating a highly consistent competitive edge. This kind of R&D is established through an internalmethodology known as TRSelect (Technology Research Selection Process), which seeks to achieve an openinnovation system in which patenting activities are crucial.

Gamesa stands out for having a patent portfolio amounting to 816 patent applications throughout the worldcovering 166 patent or invention families, of which 518 have been recognized as patents with patent rightsby patent and trademark offices in several countries.

The independent firm Totaro & Associates submitted a report informing about the joint Gamesa-Siemenscompany for the first time at the end of 2016. Both companies together are ranked second in the world,behind General Electric and above Vestas Wind Systems, which is ranked third.

Some of the significant R&D and innovation projects in which Gamesa took part in 2016 included:

Windtrust, which aims to demonstrate on a real-scale onshore prototype (2 MW) a set oftechnologies that would allow the reliability of wind turbines to be increased in a sustainable way. It isthe natural continuation of the Realiawind project (aimed at delving deeper into the concepts of windturbine design and operating and maintenance reliability to achieve greater availability and lowermaintenance costs). Several technologies have been successfully implemented on the rotor, windturbine control and power electronics. More specifically, these include the application of the geartechnology developed jointly with LM Windpower to blades which allows noise emissions to bereduced by 2 db.

Demowind, which is focused on developing new control functionalities that seek to increase theenergy generated under certain of the turbine’s operating and wind speed conditions, including, forinstance, the self-correction of undesired yaw and pitch misalignments, etc.

Table 51.- Research and development (R&D) expenditure

(€ million) 2016 2015 2014 2013 2012

Capitalized R&D expenditure 55 45 50 49 75

Non-capitalized R&D expenditure 11 24 26 33 38

Total 66 69 76 82 113

Table 52.- R&D Ranking according to EU Industrial R&D Investment Scorecard51

(year’s data on previous year) 2016 2015 2014 2013 2012

Ranking in Europe (EU Top 1000 companies) 312 279 234 195 198Ranking in Spain (EU Top 1000 companies) 12 12 11 9 8Ranking in sector (industrial engineering) 32 29 22 20 19R&D investment growth in one year (%) (10) (16) (19) 10.1 152.9R&D investment growth in three years CAGR-3y (%) (15) (9.5) 31 39 47R&D investment intensity (%) 1.9 2.7 3.9 4.2 3.4

51See: http://iri.jrc.ec.europa.eu/home



G4-EC1 Direct economic value generated and distributed

Table 53.- Direct economic value generated and distributed52

(in € thousand) 2016 2015 2014 2013 2012

Direct economic value generated 4,646,023 3,528,767 2,902,222 2,351,688 2,870,928

Economic value distributed 4,398,998 3,384,629 2,731,099 2,111,422 2,569,595

Operating costs 3,692,105 2,859,945 2,284,569 1,717,551 2,078,579

Employee wages- personnel expenses 407,925 341,050 302,924 309,625 371,674

Capital payments to suppliers of capital-dividends

5375,321 42,561 23,040 0 0

Financial expenses 49,305 47,125 54,355 55,040 81,321

Payments to public administrations 168,963 90,180 63,232 26,270 35,043

Investments to benefit the community54 5,379 3,768 2,979 2,936 2,978

Retained economic value 247,025 144,138 171,123 240,266 301,333

G4-EC2Financial implications and other risks and opportunities for the organization’s activities due to climatechange

The growing number of countries committed to renewable energies as a mechanism to contain climatechange and the growing competitiveness of renewable sources of energy stand out. These include windenergy, which therefore sets the bases for a solid demand outlook in the short, medium and long-term.

The demand outlook in the short and medium-term is therefore good.

The growing support for renewable energies is clearly reflected in the speed with which the Paris Agreement– signed on December 12, 2015 by 195 countries – entered into effect (November 4, 2016), while thegrowing competitiveness of wind energy was reflected in the outcomes of the numerous energy auctionsthat took place in both emerging and mature countries over the course of 2016. These auctions reveal thatwind energy is competitive when compared to traditional sources of energy in a large number of regions.

In terms of competitiveness, it is also estimated that new wind power facilities – which are alreadycompetitive in many countries – will be much cheaper than carbon or gas facilities in practically allgeographic areas by 2027, particularly due to the price of CO2 emissions, while the cost of onshore windpower will have been reduced by 41% by 2040 as a result of a series of factors, including: a reduction inequipment and development costs, low financing costs and mainly an increase in wind turbine capacityfactors.

Within this environment of greater government support and more competitive wind power, it is estimatedthat “clean” energy sources (zero greenhouse gas emissions) will account for 60% of total installed capacityby 2040, a rise of 31% compared to 2015. Developing (non-OECD) countries, led by China and India, willconcentrate most of the new installed capacity. Economic growth and electrification in these countries arethe main driving forces for the growth in energy demand and investment in new generating capacity. It isestimated that 1.825 GW of solar power will be installed during the period 2016E-2040E and attractinvestments totaling USD 3 trillion55.

52Direct economic value generated and distributed, including revenues, operating costs, employee wages, donations and other communityinvestments, undistributed benefits and payments to suppliers of capital and governments.

53Gamesa has signed a merger agreement with Siemens. The General Shareholders' Meeting held on October 25, 2016 approved the merger.It likewise agreed to change the Board of Directors' composition and an increase of capital to cover the swap with 401,874,595 newlyissued shares, subject to the merger's effective completion. Should the merger's effective completion take place prior to the 2017 AnnualGeneral Shareholders' Meeting, the current Board of Directors shall be empowered to propose to the General Shareholder's Meeting therelevant resolution on the dividend distribution on all of the shares after the aforementioned Increase of capital.

54Includes expenditure in associations, sponsorships and patronage.

55See Activity Report 2016: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/informacion-financiera/resultados-

trimestrales/2016/informe-de-actividad-2016.pdf



G4-EC3 Coverage of the organization’s defined benefit plan obligations

Social benefits are made up of a series of social complements which complete the compensation packageand provide employees, and at times their families, with short and long-term protection.

The identification and overall management of the social benefits provided in each country is done accordingto each country’s legislation, uses and customs. Said identification and management is performed by thecorporate Compensation and Benefits Area in conjunction with the regional human resources departmentswith a dynamic overview and through processes intended to delimit, control and mitigate any risksassociated to the social benefits, which have to be materialized through an insurance policy.

It is should likewise be mentioned that the different countries where Grupo Gamesa operates have differentcultures and different social benefit schemes. This fact is reflected in the financial statements, making itnecessary to suitably adapt said benefits to each country’s prevailing legislation.

Gamesa currently provides complementary benefits in the United States, the United Kingdom, Finland,Germany, Sweden, Ireland and Morocco in accordance with their specific legislation.

G4-EC4 Financial assistance received from governments

Gamesa’s investment strategy is viewed in a positive light by several administrations. New R&D investmentsubsidies granted to Gamesa in 2016 amounted to €2.79 million (€1.6 million in 2015). This assistance wasgranted by national and regional administrations, such as the Center for Industrial TechnologicalDevelopment (CDTI), the European Commission under the H2020 program, the Basque Government, theGovernment of Galicia, the Government of Cantabria and the Ministry of the Economy and Competitiveness.

In addition, Gamesa took out low-interest loans for R&D and productive investments totaling €3.46 million in2016 (€2.31 million in 2015) from the Center for Industrial Technological Development and the Ministry ofthe Economy and Competitiveness.

Table 54.- Significant financial assistance received

(€ million) 2016 2015 2014 2013 2012

New subsidies for R&D and productiveinvestments

2.79 1.60 3.25 2.5 6.3

New low-interest loans for R&D and productiveinvestments

3.46 2.31 4.25 10.5 18

Total 6.25 3.91 7.50 13.00 24.30

There is no record of any public administrations holding an interest in the companies belonging to GrupoGamesa.

Market Presence


Grupo Gamesa is equipped with personnel recruitment procedures which comply with the principles of non-discrimination and equal opportunities. Its recruitment processes are based on the candidates’ merits andensure their participation in them under the above-mentioned principles. The management approaches setout in the chapter entitled “Labor Practices and Decent Work” of this report apply to its professionals’remuneration and recruitment.



G4-EC5 Ratio of standard entry level wage to local minimum wage

At Gamesa, each professional is associated to a salary band to which a salary range is assigned. This rangereflects Gamesa’s competitive positioning in the labor market (average).

An employee’s wage level is specifically set by taking into account responsibilities / demands of the specificwork post, the experience and know-how which the person provides to the work post, the benchmarkmarket salary and the salaries of other employees in the same band.

Only in Spain and Brazil are there specific groups whose remuneration is set by the collective agreementswhich apply to them.

G4-EC6 Senior management hired from the local community

The principles of non-discrimination and equal opportunities which apply to Gamesa are set out in the EthicalCode, the different collective agreements and the policies and procedures which have been approved andimplemented, such as the:

The Diversity and Inclusion Policy

The Equality Plan

The application of these principles ensures merit-based recruitment processes.

Gamesa adopts the criterion of promoting and favoring the hiring of people locally in the geographic areaswhere it performs its activities. It also endeavors to ensure that such people can reach managementpositions in the relevant companies.

Furthermore, Gamesa understands that is needs committed and professional personnel who continuouslyfoster international growth to position itself as a world-leading firm in the industry. Internationalassignments are fundamentals for Gamesa in this context. They allow the business to have people with theright skills and knowledge at the right place at all times. Through its global mobility program, Gamesabroadens its professional culture by giving talented employees the opportunity to live in and travel todifferent countries, broaden their experience, learn new skills and establish a global personnel network. Fortheir part, employees with international experience provide more thorough knowledge and are an essentialasset for customers and the attainment of local goals.

In 2016, 83.5 % of executives were hired locally. An executive is construed as a person having managementresponsibilities in the company.

Table 62.- Workforce: Locally hired executives56

2016 2015 2014 2013 2012

SPAIN 97.8% 93% 93% 93% 94%EMEA (excluding Spain) - 100% 40% 100% 100%USA 55.6% 33% 50% 50% 66.7%APAC 50% 67% 83% 83% 56%INDIA 76.9% 100% 100% 100% 100%BRAZIL 71.4% 67% 100% 100% 100%LATAM 22.2% 50% - - -

56Note: For the purposes of this indicator, people forming part of groups in charge of setting general strategies and policies, advising onstrategic issues, setting business targets and whose work focuses on the long term with responsibility for Gamesa's critical processes, suchas the profit and loss account, are considered as executives.

This also applies for those who design and oversee the implementation of any general strategies set with responsibility for developingspecific strategies, policies, rules and procedures for their own business unit or division.



Indirect economic impacts


Along with the direct economic impacts the company causes as a result of the monetary flows it generates, italso causes other additional or indirect impacts, like the one described in this section.

G4-EC7 Development and impact of infrastructure investments and services providedG4-EC8 Significant indirect economic impacts

The expansion of electricity supplies obtained from wind energy has a significant indirect economic impact,since it boosts local and regional economies by creating new job opportunities, strengthens the economicand industrial fabric in the area where it has been implemented and promotes social and economic progress.

This is due to the fact that wind power generation facilities, equipment and services are located in dispersedgeographic areas depending on the available wind energy resources and the consequent creation ofeconomic activity in mainly rural areas. Proof of this can be seen in the high invoicing levels of suppliersthroughout the world set out in section G4-12 (p. 34) of this report.

These same facilities create a significant number of indirect jobs in the region’s local contracting firms, whichin turn generate addition demand for catering, security, health, specialized professional and transportservices.

The activity also promotes the training of professionals and qualified jobs in local communities, such as, forinstance, wind farm maintenance services. In general terms, it should be mentioned that local communitiesare supported through the sponsorship of initiatives by institutions and local and environmentalorganizations as an additional indirect economic effect.

Furthermore, wind energy electricity generation leads to the local, regional and national collection of levies,duties and taxes.

The facilities’ negative impact on the landscape and their possible negative effects on traditional activities(during their construction and operation stages), particularly on rural activities like stock breeding, hunting orfishing, are among the negative aspects linked to wind energy. Other environmental risks which couldpotentially lead to unwanted consequences on the environment, like effluents, inappropriate emissions orwaste, are minimized through the waste management models described in section II.10 of this report.

Procurement practices


One of the objectives of Gamesa and the companies which comprise Grupo Gamesa is to create relationshipswith suppliers, contractors and collaborators which are based on trust, reporting transparency and sharedknowledge, experience and capabilities. The management approach to procurement practices is described ingreater detail under indicator G4-12 (p. 34) of this report.

G4-EC9 Proportion of spending on local suppliers

Gamesa is continuing to build up local capacity through the supply chain’s localization in the differentregions. Thus, the company has managed to globalize its supply profile, which includes: global suppliers witha local presence, new locally-based suppliers and globalization of current suppliers.

The degree of localization (local procurement) can be seen in greater detail under indicator G4-12 (p. 34) ofthis report.

CORPORATE RESPONSIBILITY REPORT 2016 | PART II. SPECIFIC STANDARD DISCLOSURESSection II.10 ENVIRONMENTAL DIMENSION


II.10.- ENVIRONMENTAL DIMENSION

Environmental performance


Continuous improvement and collaboration in the attainment of sustainable development are amongGamesa’s commitments. From a prevention standpoint, it manages and applies good practices geared atenvironmental protection and encourages information and training on this culture.

Environmental principles in the Code of Conduct

Gamesa’s general standards of professional conduct also state that preserving the environment is one of thecompany’s guiding principles, which is ensured through the approval of an appropriate environmental policyand the implementation of an environmental management system.

Everyone who works at Gamesa should know about and assume said policy in the area in which they operateand should always act in accordance with the criteria of respect and sustainability, adopt environmental bestpractice habits and behavior and contribute positively and effectively to achieving the objectives which havebeen set. They should make every effort to minimize the environmental impact arising from their activitiesand from the use of the facilities, equipment and work resources placed at their disposal, endeavoring tomake efficient use of them.

Integrated Excellence Policy57

Through its Integrated Occupational Health and Safety, Environmental and Quality Policy, Gamesa has set thefull satisfaction of internal and external customers as a target for all its processes. In order to achieve this, ithas established a safe work environment, ensures maximum respect for the environment throughout the lifecycle of its products and adheres to an advanced quality system.

Policy Against Climate Change58

Gamesa is aware that climate change is a fundamental threat the markets and sustainable development face.It has therefore drawn up a Policy Against Climate Change, which applies across the company and its group,through which it undertakes to foster the renewable energies which are deemed suitable and within its reachto attain a global low-carbon energy generation model that reduces environmental impact.

This statement was drawn up to fulfill the Overall Corporate Social Responsibility Policy, by means of whichGrupo Gamesa fosters the sustainable use of resources, the culture of respect for the natural environmentand the fight against climate change by reducing the environmental impact of the company’s activities,defending biodiversity and encouraging information and training on said culture.

The company has made undertakings to several business initiatives aimed at reducing greenhouse gasemissions, such as the American Business Act on Climate Pledge59 or the Paris Pledge for Action60.

Thus, Gamesa has incorporated the precautionary principle with regard to environmental protection inaccordance with the provisions of Article 15 of the Rio Principles. This principle has been widely accepted inlaws and regulations aimed at protecting the environment.

57See: http://www.gamesacorp.com/recursos/doc/rsc/compromisos/clientes/certificaciones-ohsas-y-i/politica-excelencia-gamesa.pdf

58See: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-corporativo/politicas-corporativas/politicas-resp-

social/politica-contra-el-cambio-climatico.pdf59

See: https://obamawhitehouse.archives.gov/the-press-office/2015/12/01/white-house-announces-additional-commitments-american-

business-act60

See: http://www.parispledgeforaction.org/whos-joined/



Environmental performance and targets

As far as its performance in 2016 is concerned, the main achievements reached by Gamesa are set outbelow:

Substantial improvement in the final destination of waste, the percentage of which destined torecycling, recovery and/or reuse rose by 3.7% on the previous year.

Verification of greenhouse gas emissions according to the ISO 14064 standard for the sixth year in arow.

Ecodesign certification for the G128-5.0 MW (tower of 140 m) and G132-5.0 MW (tower of 95 m)wind turbines, whose environmental product declarations (EPD) were published by Environdec.

Collaboration with Iberdrola and Scottish Power to obtain the Kilgallioch wind farm’s EPD.

Consolidated environmental management system

The integrated management system (IMS) includes environmental management in accordance withISO14001 standard, quality management in accordance with the ISO 9001 standard and health and safetymanagement in accordance with the OHSAS 18001 standard. Systems are therefore in place to identify theenvironmental and energy-related aspects of the activities, products and services the company monitors andcan influence within the scope defined for its integrated management system, taking into account new orplanned developments, as well as new or modified activities, products and services. Along these lines, it isequipped with a multi-site system, which is maintained according to the ISO 14001:2015 standard ofreference.

Practically all of Gamesa’s production capacity around the world is certified by these standards.

Operating responsibility for this activity rests with the HSEQ Department, which reports directly to theIndustrial Department in organizational terms. This unit’s mission is to promote, strengthen and overseeoccupational health and safety, as well as environmental and quality issues through each area’smanagement.

Table 55.- Status of the management systems’ certifications

Region Country Location Division ISO9001

ISO14001

OHSAS18001

EMEA Spain Ágreda, Soria Nacelles 2005 2005 2009EMEA Spain Sigüeiro, A Coruña Nacelles 2001 2005 2009EMEA Spain Lerma, Burgos Gearboxes 2005 2006 2009EMEA Spain Asteasu, Gipúzcoa Gearboxes 2004 2005 2009EMEA Spain Mungia, Vizcaya Gearboxes 2006 2008 2009EMEA Spain Burgos Gearboxes 2005 2009 2007EMEA Spain Aoiz, Navarre Blades 2010 2010 2010EMEA Spain Somozas, A Coruña Blades 2001 2005 2009EMEA Spain Miranda, Burgos Blades 2001 2005 2009EMEA Spain Cuenca Blades 2001 2005 2009EMEA Spain Benissanó, Valencia Generators 2006 2007 2009EMEA Spain Coslada, Madrid Generators 2005 2005 2009EMEA Spain Reinosa, Cantabria Generators 2003 2005 2009EMEA Spain Madrid W. Farm D&S - 2011 -APAC China Tianjin Generators 2008 2008 2009APAC China Tianjin Gearboxes 2008 2008 2009APAC China Tianjin Nacelles 2008 2008 2009INDIA India Marmandur Nacelles 2009 2010 2010INDIA India Gujarat Blades 2012 2012 2012BRAZIL Brazil Camaçari Nacelles - 2015 2015



Materials


Through its excellence policy, Gamesa undertakes to: “Prevent pollution through the rational and optimizeduse of resources by minimizing waste, emissions and effluents over the entire life cycle.”

G4-EN1 Materials used by weight and volume

The company’s consumption of raw materials in 2016 stood at 257,206 tons, of which 32.041 tons weresteel, sheet and casting materials and 69,921 ones were foundation materials. Consumption in the year roseby 71% when compared to the preceding year, mainly due to the consumption of materials used in windfarm civil works, which accounted for 46% to the total increase.

In spite of this rise, Gamesa continued to invest in ecodesign and in minimizing the materials consumed by itsproducts. A good example of this is Gamesa G10x-4.5 MW turbine, whose consumption is much lower thanthat of a 2 MW wind turbine: 31,590 liters of lubricating oil less and 2,140 liters of hydraulic oil less (23.3%less) , which is equivalent to 60 air filter units less.

The ratio of materials used increased to 27 tons per employee per year in 2016.

Table 56.- Materials used by weight or volume

(expressed in tons-t) 2016 2015 2014 2013 2012

EMEA 174,095 82,736 64,212 76,904 82,274USA 0 0 0 0 3,319APAC 17,358 13,952 13,820 7,568 3,378INDIA 59,193 34,832 26,746 15,929 15,745BRAZIL 2,825 18,034 7,266 3,107 9,571LATAM 3,735 - - - -

Total 257,206 149,554 112,044 103,507 119,687

Table 57.- Consumption of the most significant raw materials


Oils 1,165 2,632 934 652 370Solvents 45 568 29 42 169Paints 278 1,230 372 185 147Steel and sheeting 11,663 8,208 0 1,738 4,960Scrap 7,105 7,786 9,801 6,527 5,073Casting 13,273 10,170 6,037 12,949 10,587Prepreg 2,477 2,069 1,284 5,310 14,109Coatings 107 4,867 48 168 234Adhesives 1,023 6,861 179 505 432Foundation materials 69,921 - - - -Total of most significant raw materials: 107,057 44,391 18,648 28,077 36,081

% total consumption 42% 31% 17% 27% 30%

Table 58.- Raw material consumption by semi-finished product line


Gearboxes 29,937 19,201 19,890 13,680 18,959Frames 29,862 13,953 17,575 12,248 11,230Generators 12,245 8,121 8,141 5,890 5,154Axels 4,567 2,090 3,715 3,408 7,532Transformers 9,453 9,756 3,798 3,086 4,071Electricity panels 4,592 2,258 701 1,258 745Total semi-finished products: 90,656 55,379 53,820 39,569 47,691

% total consumption: 35% 39% 48% 38% 40%



Table 59.- Ecoefficiency in raw material consumption

2016 2015 2014 2013 2012

(t/employee) 27 20 17 17 18(t/€ mill. of invoicing) 56 42 39 44 42

G4-EN2 Percentage of materials used that are recycled input materials

Although no recycled input materials exist on the market for most of the main materials used by Gamesa, itshould be indicated that 12,096 tons of scrap metal were recycled as part of the casting process at GamesaBurgos.

Energy


Total internal energy consumption amounted to 520,540 gigajoules in the year. In absolute terms, thisaccounted for a 12% year-on-year rise with regard to 2015. Hence, the figure for energy consumption peremployee per year amounted to 56 gigajoules.

G4-EN3 Energy consumption within the organization

Energy consumption within the organization, which includes all facilities, buildings and offices belonging toGrupo Gamesa, is calculated by adding up the following items:• Direct energy consumption of fuels for the production of products and services.• Indirect energy consumption of electricity bought from third parties for buildings/offices.

Table 60.- Non-renewable fuel consumption

(expressed in gigajoules-GJ) 2016 2015 2014 2013 2012

Natural gas (GJ)EMEA 68,735 61,260 48,375 95,825 114,661USA 25,999 8,590 584 23,716 28,715APAC - - - 185 10,711INDIA - - - - -BRAZIL+LATAM 0.8 8 - - -

94,735 69,860 48,959 119,727 154,087

Propane (GJ)EMEA 8,613 7,577 6,550 7,504 6,845USA - - - 93 832APAC - - - - 1INDIA - - - - -BRAZIL+LATAM 141 33 487 72 32

8,753 7,610 7,037 7,669 7,710

Diesel (GJ)EMEA 85,487 65,562 28,535 81,711 41,602USA 841 - - 1,125 11,601APAC 1,614 1,587 1,423 843 1,040INDIA 2,721 3,794 3,830 4,112 10,319BRAZIL+LATAM 337 266 108 42 58

91,000 71,210 33,897 87,834 64,621

Gasoline (GJ)EMEA - - - - -USA 30,488 21,750 1,595 7,096 141APAC - - - - -INDIA - - - - -BRAZIL+LATAM 3,114 10,307 1,378 44 -

33,602 32,057 2,973 7,140 141

Total non-renewable fuel consumption (GJ) 228,091 180,737 92,867 222,369 226,797



Table 61.- Total energy consumption within the organization


Non-renewable fuels 228,091 180,737 92,867 222,369 226,559EMEA 162,835 134,400 83,460 185,040 163,108USA 57,328 30,340 2,179 24,934 41,148APAC 1,614 1,586 1,423 1,028 11,752INDIA 2,721 3,794 3,830 4,112 10,319BRAZIL+LATAM 3,593 10,615 1,973 158 90

Electricity consumed from the grid 292,450 271,812 215,427 284,483 347,990EMEA 216,099 217,518 164,797 225,021 263,930USA 7,307 7,324 9,079 24,138 38,628APAC 20,881 16,792 19,378 17,006 24,894INDIA 44,565 24,183 21,182 17,823 20,026BRAZIL+LATAM 3,599 5,995 993 493 511

Total energy consumption (GJ) within theorganization

520,540 452,549 308,294 506,852 574,549

Total energy consumption within the organization = (Non-renewable fuel consumption) + (Grid electricity consumed)

Fig 26.- Energy consumption evolution - Total (GJ) Fig 27.- Energy consumption evolution - Total by areas (GJ)

Fig 28.- Energy Consumption (GJ) per MW installed Fig 29.- Energy Consumption (GJ) per employee

In addition, Gamesa has wind farms dedicated to prototype research and development activities and windfarms whose sale has not yet been closed, which together have a total power output of 136 MW. These parksgenerate renewable (wind) energy, which is sold and transmitted directly to the electricity grid without beingconsumed by the group. More specifically, this report provides information on the electric power producedby the wind farms in La Plana, Cabezo Negro, La Cámara, Jaulín, Dos Picos and Alaiz in Spain, and in Lingbo,Sweden and Pocahontas, USA.

574,549

506,852

308,294

452,549

520,540

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2012 2013 2014 2015 2016

ElectricityNon-renewable fuelsTotal energy consumption within the organization

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

EMEA USA APAC INDIA BRAZIL

2012 2013 2014 2015 2016

218.88 244.74

127.34 134.93122.14

0

50

100

150

200

250

2012 2013 2014 2015 2016

Inte

rnal

ener

gyco

nsu

mp

tio

nG

J/

MW

inst

alle

d

86.45 83.38

47.9462.24 55.57

0

50

100

150

200

250

2012 2013 2014 2015 2016

Inte

rnal

ener

gyco

nsu

mp

tio

nG

J/

emp

loye

e



This energy generating capacity is not included in the internal energy consumption balances above, since it isnot a recurring activity of the group. Moreover, its inclusion in the balances would give rise to negativeenergy consumption balances for the group (energy surplus).

Table 62.- Renewable energy generation (GJ)


EMEA 538,167 499,614 476,732 513,939 231,410USA 969,447 953,280 892,735 892,735 446,367

Wind energy generation 1,507,614 1,452,894 1,369,701 1,406,674 677,777

G4-EN4 Energy consumption outside the organization

The most relevant energy consumption outside the organization is connected to suppliers shipping productsand employee transport for both business reasons as well as employees commuting between their homesand their workplace. Work is currently being done to obtain information on the scope of this kind ofconsumption from the most relevant suppliers.

G4-EN5 Energy intensity

The following table shows the evolution of the energy consumption within the organization in relation to thetotal number of employees and invoicing expressed in millions of euros.

Table 63.- Ecoefficiency in energy consumption

2016 2015 2014 2013 2012

(GJ/employee) 55.57 62.24 47.94 83.38 86.45(GJ/€ mill. of invoicing) 112.86 134.93 127.34 244.74 218.88

G4-EN6 Reduction of energy consumption

Gamesa carried out actions aimed at reducing energy consumption and improving energy efficiency in 2016,which led to a reduction amounting to 330,051 kWh. These actions are described in detail under indicatorG4-EN19 (Page 109 ).

G4-EN7 Reductions in energy requirements of products and services

The products Gamesa markets are designed to consolidate environmental leadership and energy efficiency ata global scale.

The certification in ecodesign (ISO14006:2011) of the Gamesa 4.5 MW61 and Gamesa G114-2 MW62 ensuresminimal environmental impact, greater energy efficiency and lower costs of energy throughout all the stagesof the wind turbine life cycle, including: design, raw materials and components procurement, manufacturing,delivery, installation, operation, maintenance and dismantling.

As a result, Gamesa wind turbines record better efficiency figures for all indicators, including: size, weight,visual impact, reduction of materials and selection of those with low environmental impact, optimization ofproduction, reusable packaging, less civil and installation works, noise minimization, optimization of wastegeneration during maintenance and a modular design to facilitate dismantling.

61http://www.gamesacorp.com/recursos/doc/rsc/compromisos/clientes/certificaciones-ohsas-y-i/documentacion-declaracion-ambiental-g90.pdf

62http://www.gamesacorp.com/recursos/doc/productos-servicios/aerogeneradores/environmental-product-declaration-g114-20-mw.pdf



Water


Water consumption at Gamesa is mainly at production centers, where the best practices available are usedto reduce water withdrawal and consumption and to include reused water in production processes. Work isalso being done on lowering environment impact by avoiding water withdrawal in water-stressed areas.

Moreover, the company is focusing on making efficient and responsible use of sanitary water at offices andcontrol buildings, for which awareness raising campaigns are being conducted and water consumptionreduction systems are being installed, like automated taps for instance.

G4-EN8 Total water withdrawal by source

Water is mainly withdrawn from the public supply network at Gamesa. However, groundwater is alsowithdrawn in EMEA and India. Total water withdrawal amounted to 159,598 m3 in 2016, which translates toa figure of 17 m3 per employee per year.

Table 64.- Total water consumption

(expressed in m3) 2016 2015 2014 2013 2012

EMEA 64,638 35,990 25,692 27,027 30,241Water supply networks 63,005 33,716 24,241 24,020 24,384Groundwater 1,633 2,274 1,451 3,007 5,857

USA63 - - - 1,985 3,520

APAC 30,386 27,993 39,891 29,298 47,512INDIA 57,785 28,753 31,757 21,738 13,987

Water supply networks 38,306 13,970 - - -Groundwater 19,479 14,783 - - -

BRAZIL 6,774 33,622 - - -LATAM 14 - - - -

Total water consumption 159,598 126,358 97,341 80,048 95,261

Table 65.- Eco-efficiency in water consumption

2016 2015 2014 2013 2012

(m3/employee) 17 17 15 13 14

(m3/€ mill. of invoicing) 35 36 34 34 33

G4-EN9 Water sources significantly affected by withdrawal of water

There is no record of any water sources being significantly affected by water withdrawals made by Gamesa in2016. In other words, no water sources were recorded in to have been significantly affected by withdrawalswhich amounted to more than 5% of the total annual average of any water mass or withdrawals from watermasses recognized by experts as being especially sensitive due to their relative size, function or uniquenature, or because they are a threatened or endangered system (or because they shelter protected plants oranimals), or from Ramsar wetlands or from any other local or international protected area.

All withdrawals of water are strictly regulated by public administrations, which grant permits and set themaximum withdrawal volumes allowed to ensure no significant impacts take place.

63Note: There were no production plants in operation in the United States in 2014, just offices, whose total water consumption was deemed

negligible.



G4-EN10 Percentage and total volume of water recycled and reused

All sanitary water effluents from the Mamandur and Halol plants in India are treated at a reverse osmosispurification plant and reused to water the facility’s own green areas. These plants are also equipped withsolar panels, which reduces their greenhouse gas emissions to zero.

Biodiversity


Gamesa uses certain natural resources (water, fossil fuels and wind) to perform its activities, therebyproducing interactions with several ecosystems, landscapes and species. This mainly happens in two stages:

During the construction stage, for example, by using vehicles and machinery, opening up paths,removing vegetation, prolonged human presence (which temporarily affects the behavior of speciesof fauna in a generally reversible way) and changes made to the landscape.

During the operating stage, for example, by generating emissions, animal mortality due to collisionsand electrocution, making changes to the vegetation to maintain electric power lines, etc.

The aim is to perform the company’s activities and set up new projects in a sustainable way that would allowfor a balanced coexistence, thus conserving and protecting natural assets. This respect for biodiversity andecosystems plays a leading role in the company’s business strategy. There are different regulatory andvoluntary instruments for this, whose aim is to achieve a positive net balance in relation to the environment,including:

The Excellence Policy

Compliance with any permits granted by environmental regulatory authorities for each region’sfacilities, which set out constraints and obligations to ensure the local environment’s protection.

Setting environmental and control plans and implementing management systems, the majority ofwhich have been certified according to the ISO 14001 standard to prevent and control environmentalrisks.

For new infrastructure projects, fulfilling legislation which applies to the processing of projects andconducting environmental impact studies before their construction, which include analysis andprevention mechanisms that take into account different alternatives and lay down correctivemeasures to avoid, mitigate or offset any possible damage.



G4-EN11Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of highbiodiversity value outside protected areas

Gamesa had the operating facilities set out below located in protected and unprotected areas having highbiodiversity value in 2016. Facilities adjacent to such areas have also been included.

Projectstatus

Surfacearea

occupied

Protected areaaffected

Distanceto area

Biodiversity value Type ofprotection

Project: Cabezo Negro R&D Wind Farm (Spain)Operational 0.008 km

2Rio Huerva y las Planas Included Protected area

Natura Network 2000Special Bird Protection Area(SBPA)

Project: Jaulín R&D Wind Farm (Spain)Operational 0.008 km

2Rio Huerva y las Planas Included Protected area

Natura Network 2000Special Bird Protection Area(SBPA)

Project: Boyal I and II Wind Farm (Spain)Operational 0.0234 km

2Peñadil, Montecillo andMonterrey

0.8 km Protected areaNatura Network 2000

Site of Community Interest(SCI) / Special ConservationArea

Project: La Cámara Wind Farm (Spain)Operational 0.035 km

2Intercontinental delMediterráneo Andalucía(Spain) - Morocco

2.5 km International protectedarea

Biosphere reserve

Desfiladero de losGaitanes


RENPA Natural Landscape./(SCI)/ (SBPA)

Sierras de Abdalajís andLa Encantada Sur


Site of Community Interest(SCI)

Project: Llynfi Wind Farm (United Kingdom)Construction 0.109 km

2Mynydd Ty-isaf 350 m National protected area SSSICraig-y-Iiyn Adjacent National protected area SSSICWM Gwrelych andNant Llyn Fach Streams

Crossing Protected area

National

SSSI (Geology)

Project: SET electricity facility, Les Forques Wind Farm (Spain)Operational 0.006 km

2Obagues del Riu Corb 3.5 km Protected area

Natura Network 2000Special Protection Area (SPA)Site of Community Interest (SCI)

Project: SET electricity facility, Cortes (Spain)Operational 0.002 km

2Peñadil, Montecillo andMonterrey


Special Protection Area (SPA)Site of Community Interest (SCI)

River Ebro 4.6 km Protected areaNatura Network 2000

Nature reserveSite of Community Interest (SCI)



Projectstatus

Surfacearea

occupied


Distanceto area


Project: High Voltage Line (H.V.L.) Montargüll-Les Forques (Spain)Operational 0.116 km

2Obagues del Riu Corb 0.95 km Protected area

Natura Network 2000Special Protection Area (SPA)Site of Community Interest (SCI)

Project: High Voltage Line (H.V.L.) Les Forques-L’Espluga and SET Les Forques-Support 27 Les Forques-Les Comes (Spain)Operational 0.096 km

2Muntanyes de Prades 2.12 km Several extreme climate

habitatsSpecial Protection Area (SPA)Site of Community Interest (SCI)

Project: High Voltage Line (H.V.L.) Jaulín-Cabezo Negro (Spain)Operational Air:

0.01352 km2

Underground:0.0085 km

2

Rio Huerva and lasPlanas

Included Protected areaNatura Network 2000

Special Bird Protection Area(SBPA), Natura Network 2000

Project: High Voltage Line (H.V.L.) Valdeconejos-La Escucha (Spain)Operational Air:

0.1006 km2

Underground: 0.00013km

2

Desfiladeros del RíoMartín

Included Protected areaNatura Network 2000

Special Bird Protection Area(SBPA), Natura Network 2000

Río Martín Cultural Park 1.7 km Protected areaNatura Network 2000

Site of Community Interest (SCI)Natura Network 2000

Project: High Voltage Line (H.V.L.) Ameixeiras-Masgalán (Spain)Operational 0.18 km

2Serra do Candán Included Protected area

Natura Network 2000Regional protected area

Site of Community Interest (SCI)ZEPVN of the Galician ProtectedSpace Network

0.23 km2

Serra do Xistral Included Protected areaNatura Network 2000

Site of Community Interest (SCI)

High Voltage Line (H.V.L.) Albarellos-Cando (Spain)Operational 0.65 km

2Serra do Cando Included Protected area



Pena Corneira 2.4 km Regional protected area Natural monument of theGalician Protected SpaceNetwork

Serra do Candán 4.9 km Protected areaNatura Network 2000Regional protected area


Project: High Voltage Line (H.V.L.) Ameixeiras-Cando (Spain)Operational 0.41 km

2Serra do Candán Included Protected area



Serra do Cando 2.71 km Protected areaNatura Network 2000Regional protected area




Projectstatus

Surfacearea

occupied


Distanceto area


Project: High Voltage Line (H.V.L.) Montecastelo-Portodemouros (Spain)Operational 0.41 km

2Sobreirais do Río Arnego 4.9 km Protected area



Ulla-Deza River System 5 km Protected areaNatura Network 2000Regional protected area


Project: High Voltage Line (H.V.L.) Muras I (Spain)Operational 0.09 km

2Serra do Xistral 3 km Protected area

Natura Network 2000Site of Community Interest (SCI)

Project: High Voltage Line (H.V.L.) Serra da Loba (Spain)Operational 0.32 km

2Betanzos-Mandeo 4.2 km Protected area



Fragas do Eume 4.9 km Protected areaNatura Network 2000Regional protected area


Project: High Voltage Line (H.V.L.) Serra of Meira (Spain)Operational 0.13 km

2River Eo 3.3 km Protected area



G4-EN12 Description of significant impacts of activities, products and services on biodiversity in protected areasand areas of high biodiversity value outside protected areas

As a general rule, protected areas and areas of high biodiversity value without protection are avoided duringthe design stage of new infrastructures.

Any possible environmental impacts are analyzed before the facilities are built by conducting a forecast andan assessment beforehand. Where an impact is significant, the project is changed as much as possible andthe available technical improvements are made and the necessary measures to correct and minimize theimpact are taken. If it cannot be completely mitigated, offsetting measures are taken.



Table 66.- Biodiversity Studies

2016 2015 2014 2013 2012

Development stagePreliminary EIA 1 3 3 - 1Archeology - - - 3 -Environmental impact studies (EIA) 2 2 7 12 12Bird fauna and bats 2 - 1 39 15Noise 2 2 3 15 1Specific studies 2 - 3 38 9

Total development stage 9 7 17 107 38

Construction stageEnvironmental monitoring 3 2 - 10 5Archeological monitoring - - - - -Others 3 1 - 1 -

Total construction stage 6 3 - 11 5

Operating stageEnvironmental monitoring 4 1 7 5 7Others 3 1 2 7 -

Total operating stage 7 2 9 12 7

Total Biodiversity Studies 22 12 26 130 50

G4-EN13 Habitats protected or restored

No kind of incidents took place in protected habitats in 2016.

G4-EN14 Number of IUCN Red List species and national conservation list species with habitats in areas affected byoperations, by level of extinction risk

The group has activities in some areas where threatened species included in the IUCN Red List64 and in othernational conservation lists live or could be present. This, however, does not mean that they are affected orthreatened by such activities.

Hence, the identification of species on the IUCN Red List and other species included in national conservationlists which could be affected by Gamesa’s activities is vital to take the necessary measures to avoidendangering them. Gamesa’s control on matters having to do with biodiversity have identified the followingspecies that are present in wind farms or high voltage lines, which have been classified by their risk ofextinction:

64Link to: http://www.iucnredlist.org



Table 67.- Species in areas affected by operations

Species IUCN category Affected bywind farm

Affected by high voltageline

Tetrax tetrax NT 6 0Neophron percnopterus EN 5 1Milvus milvus NT 6 1Marmoronetta angustirostris VU 1 0Sylvia undata NT 5 4Streptopelia turtur VU 1 0Chalcides bedriagai NT 2 1Vipera latastei VU 2 3Eliomys quercinus NT 2 8Numenius arquata NT 0 1Lutra lutra NT 0 5Oryctolagus cuniculus NT 2 8Timon lepidus NT 2 5Galemys pyrenaicus VU 0 4Arvicola sapidus VU 0 8Chioglossa lusitanica VU 0 3Iberian frog NT 0 6Lacerta schreiberi NT 0 5Achondrostoma arcasii VU 0 2Cyprinus carpio VU 0 2Anguilla anguilla CE 0 5Coracias garrulus NT 0 2Pelobates culprites NT 2 0Bombina pachypus EN 1 0Zamenis lineatus DD 1 0Elaphe quatuorlineata NT 1 0

Legend: LC = Least concerned; NT = Near threatened; VU = Vulnerable; EN = Endangered; CE = Critically Endangered; EW =Extinct in the Wild; EX = Extinct; (*): Under special protection (national)

Emissions


2025 emission target. Carbon-neutral.

Gamesa has taken up the challenge of reaching carbon neutrality in 2025.

Becoming carbon neutral is one of the most ambitious climate targets any organization could set, sinceinvolves a process of (i) calculation; (ii) reduction; and (iii) emission offsetting according to the main existingmethodologies to determine neutrality.

Carbon neutrality thus construed includes Gamesa’s individual undertakings on the measurement, reductionand/or offsetting of the CO2 generated directly or indirectly by the group over the next ten years (2015-2025). The global roadmap aimed at meeting this commitment includes a combination of adaptation andmitigation actions, such as:

Energy efficiency measures to reduce logistics area emissions by at least 10% and operations areaemissions by 15% (measured in tCO2eq/MW installed) by 2025.

Measures to purchase clean electric power for plants and offices in 2025.

Adaptation measures, such as fostering the use of electric vehicles, mobility plans which are morerespectful to the environment and projects to achieve the complete recycling of wind turbinematerials at the end of their life cycle.

CO2 emission offsetting measures, which will be materialized through an exchange of emission rightsdepending on different scenarios.



CO2 emission offsetting measures to be implemented

Gamesa will offset CO2 emissions by reducing the emissions generated by the projects carried out by thecompany in countries which are a party of the Kyoto Protocol but which do not belong to Annex I and whichneed help to reduce greenhouse gas emissions in order to contribute to the objective set out in the lastFramework Convention on Climate Change; namely stabilizing greenhouse gas emissions.

These projects have been registered under the Clean Development Mechanism (CDM) and thereforegenerate Certified Emission Certificates(CER).

A decision will be taken on the different deadlines and scenarios for the exchange of the emission reductioncredits available for the next ten years, which will subsequently be deleted from the register.

Gamesa’s undertaking to reach carbon neutrality (along with the rest of its actions in environmental andclimate issues) is expected to position it as a leading international point of reference.

Adaptation to climate change

Gamesa has conducted a preliminary strategic analysis on what climate change could mean for the company.The following tasks have been carried out in order to do so:

Key countries where the company has activities have been selected.

Climate forecasts have been made for said countries and their main planning for climate changeadaptation has been drawn up.

A preliminary analysis on the consequences climate financing could have on an organization likeGamesa.

Initiatives other companies in the industry have taken on the issue have been identified frompublicly available information.

With all of the above, a diagnostic analysis had been conducted, which has identified the following:o Principally physical risks;o Business opportunities connected with changes in the energy matrix, increase in the

electricity demand and the climate financing;o Reputation-related opportunities having to do with the inclusion of adaptation to climate

change in the company’s CSR strategy.

Emission measurements

Gamesa measures its direct and indirect emissions on an annual basis (measurement of the carbon footprint)with its operating constraints and according to the requirements set forth in the ISO 14064-1 standard. Saidmeasurements are assured by an agency accredited according to the ISO 14064-1 standard. In order to drawup the emissions inventory, the following GHG are taken into consideration in accordance with ISO 14064-1:CO2, CH4, N2O, SF6, PFCs and HFCs.

Scope 1 (direct) emissions

Direct or Scope 1 emissions are considered as any emissions generated by the combustion of materials togenerate heat.

In addition, chlorofluorocarbon substances (CFCs) and halons, traditionally used as coolants and propellants,affect the ozone layer if they are released into the atmosphere. The presence of these substances at Gamesais marginal and found mainly in fire extinguishing equipment and cooling systems. Maintenance of thisequipment, which works in closed circuits, is done in accordance with prevailing legislation.

Scope 1 emissions amounted to 14,996 tCO2-eq in 2016.

Scope 2 (indirect) emissions

Scope 2 indirect emissions are considered as any emissions generated from the purchase of electric power tooperate the company’s own resources and services. In order to calculate the indirect emissions produced byconsuming electricity, the International Energy Agency’s (IEA) data for 2015 have been taken into account,which include different conversion factors based on the electric energy’s country of origin.

Scope 2 emissions amounted to 15,160 tCO2-eq in 2016.



Total Emissions (Scope 1+Scope 2)

The company’s total emissions amounted to 30,156 tons CO2-eq in 2016, taking into account direct Scope 1emissions generated by the combustion of materials for the generation of heat and indirect Scope 2emissions generated by purchase of electricity to operate the company’s own resources and services.

Total emissions decreased by 20% on the previous year, including a reduction of 14.800 tCO2-eq in Spainresulting from the purchase of renewable energy having zero emissions.

Table 68.- Total greenhouse gas emissions (Scope 1 + Scope 2)

(expressed in tCO2-eq) 2016 2015 2014 2013 2012

EMEA 10,936 23,837 20,377 26,050 27,355USA 4,474 3,015 1,411 5,162 7,816APAC 4,070 3,437 4,223 3,684 5,958INDIA 10,266 5,591 5,341 4,539 6,528LATAM (including Brazil) 409 974 144 20 -

Total CO2 emissions 30,156 36,855 31,496 39,456 47,656

Fig 30.- Evolution of CO2 emissions (tCO2 eq) Fig 31.- CO2 emissions in 2016 by regions (tCO2 eq)

Scope 3 (indirect) emissions

In 2016, Gamesa once more measured the most significant emissions produced by services outside theorganization’s main activity (Scope 3), such as logistical transport by land and sea. This figure amounted to485,413 tCO2-eq in the year.

Emission reduction measures

As a result of the placing more than 38.8 GW of installed output capacity on the market, Gamesa preventsthe emission into the atmosphere of 58 million tons of CO2 a year by placing clean renewable energy on themarket. The balance of this contribution indicates that the new products Gamesa installed in 2016 (4,262MW) have prevented greenhouse gas emissions amounting to 211 times the emissions generated by itsactivities.

Moreover, a variety of actions aimed at reducing energy consumption and increasing energy efficiency wereimplemented and carried out throughout 2016 in several of the organization’s areas. Optimizing energymanagement is included among these actions, which led to consumption savings of almost 330,051 kWh,which amount to 81.51 equivalent tons of CO2 (tCO2-e). Gamesa has prevented air emissions of another14,827 tCO2-e by purchasing renewable energy.

56,750

47,656

39,456

31,49636,855

30,156

0

10,000

20,000

30,000

40,000

50,000

60,000

2011 2012 2013 2014 2015 2016

Direct (Scope 1) Indirect (Scope 2)

TOTAL

0

2,000

4,000

6,000

8,000

10,000

12,000

EMEA USA APAC INDIA BRAZIL LATAM

Direct (Scope 1) Indirect (Scope 2)



G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1)

Table 69.- Direct greenhouse gas (GHG) emissions (Scope 1, by origin)

(expressed in tCO2-eq) 2016 2015 2014 2013 2012Combustion

Natural gas 4,793 3,917 2,651 6,115 7,784Propane 558 484 448 483 490Gas oil 5,982 839 716 616 987Dry ice 151 139 125 73 64

Vehicles

Gas oil A 784 4,375 1,894 2,017 2,728Gasoline 2,325 2,267 210 502 589

Refrigerant gases

R404A 4.7 - - - 97.50R22 - - - - 86R407C 144 58 252 220 314R410A 217.4 - - - 122R417A - - - - -R422D - - - - -R134A 35.8 - - - 938R401A - - - - -

Dielectric

SF6 - - - - -

Total direct CO2 emissions (Scope 1) 14,996 12,079 6,297 10,038 14,202

Table 70.- Direct greenhouse gas (GHG) emissions (Scope 1, by geographic area)


EMEA 10,936 8,914 5,602 7,861 9,872USA 3,488 2,020 142 1,790 2,215APAC 120 116 111 75 661INDIA 202 277 304 301 1,454BRAZIL+LATAM 250 751 137 11 -


G4-EN16 Indirect greenhouse gas (GHG) emissions (Scope 2)

Table 71.- Indirect greenhouse gas (GHG) emissions (Scope 2, by geographic area)


EMEA 0 14,924 14,775 18,189 17,483

USA65 986 995 1,269 3,372 5,601

APAC 3,950 3,321 4,112 3,609 5,297INDIA 10,064 5,313 5,037 4,238 5,074BRAZIL+LATAM 160 223 7 9 -

Total indirect CO2 emissions (Scope 2) 15,160 24,776 25,199 29,418 33,454

65Indirect emissions fell in the United States compared to preceding years due to the energy reduction campaigns conducted by the

company, which resulted in a drop in electricity consumption and a reduction in emissions in the US electricity mix.



G4-EN17 Other indirect greenhouse gas (GHG) emissions (Scope 3)

Table 72.- Other indirect greenhouse gas emissions


Rental car transport 472 N.A. N.A. N.A. N.A.Employee vehicle transport 348 N.A. N.A. N.A. N.A.Land transport 2,184 4,384 2,428 1,642 4,023Sea transport 482,408 241,343 240,203 179,706 259,394


G4-EN18 Greenhouse gas (GHG) emissions intensity

Direct greenhouse gas emissions (Scope 1) and indirect greenhouse gas emissions from energy generation(Scope 2) have been included to calculate intensity.

Table 73.- Greenhouse gas (GHG) emissions intensity

2016 2015 2014 2013 2012

(tons CO2/employee) 3.2 5.1 4.6 6.5 7.2(tons CO2/€ mill. of invoicing) 6.5 10.5 11.0 16.9 16.7

G4-EN19 Reduction of greenhouse gas (GHG) emissions

A variety of actions aimed at reducing energy consumption were implemented and carried out throughout2016 in several of organization’s areas.

Table 74.- Reduction of greenhouse gases. Managed actions

Plant Name of initiative kWhprevented

tCO2-eprevented

Status

Spain Purchase of green/clean energy:

According to European Directive 2001/77/EC,green energy comes from sources which are fullyrenewable and prevent the emission ofgreenhouse gases into the air. The amount of cleanenergy consumed by the group in Spain in 2016totaled 60,027,473.4 kwh, which resulted in zeroair emissions.

14,827 Completed

GamesaGuipuzkoa(Asteasu I)

LED Lighting – 61,259.73Air conditioning – 131,759.17(Not accountable as emission, only as efficiency)

193,018.9 47.67 Completed

GamesaGuipuzkoa(Asteasu I)

LED Lighting – 24,563.66Air conditioning – 112,468.33(Not accountable as emission, only as efficiency)

137,031.99 33.84 Completed

Total tCO2-e prevented 330,051 14,908

G4-EN20 Emissions of ozone-depleting substances (ODS)

Pursuant to prevailing legislation, Gamesa does not currently have any cooling equipment which emits gasescontaining ozone-depleting substances.



G4-EN21 NOx, SOx and other significant air emissions

The sum of each of the parameters’ emission values are shown below. In order to do so, quantitativemeasurements were conducted at each source by an Authorized Control Entity and the total emission factorwas applied by considering each source’s throughput and hours of operation. This table excludes emissionsfrom Gamesa’s factories in China, as the emission parameters subject to control at these plants are differentaccording to prevailing Chinese regulations.

Table 75.- Other significant air emissions


CO (t) 2.79 2.97 3.41 1.0 1.9NOx (t) 5.93 2.53 3.25 1.8 2.6SOx (t) 3.08 1.96 2.27 0.1 0.1VOC (t) 1.68 1.44 9.20 13.4 4.0Particles (t) 0.90 0.36 1.54 1.8 1.0HCx (t) 0.00 0.00 0.00 0 0Total organic carbon (TOC) 1.67 4.76 4.98 2.2 14.7

Effluents and waste


The water effluents produced by Gamesa come from the use and consumption of sanitary water. Totaleffluent volumes are calculated indirectly by taking into account overall water consumption at each facilityand subtracting water for industrial use, which in most cases is evaporated through cooling towers. A factorof 80% is applied.

As regards pollutants in effluents, the method of calculation contemplates values for the differentparameters measured by an Authorized Control Entity in Spain and the corresponding organizations in Chinaand India and the flows discharged at each center. The value shown is obtained from the statistical averageof all the measurements.

G4-EN22 Total water discharge by quality and destination

The volume discharged in the year amounted to 127,678 m3, a 26% increase on the previous year’s figure.

Table 76.- Volume discharged66

(expressed in m3) 2016 2015 2014 2013 2012

EMEA 51,711 28,792 20,554 21,622 13,955USA - - - 1,588 2,816APAC 24,309 22,395 31,913 23,438 32,750INDIA 46,228 23,002 25,406 15,708 9,811BRAZIL 5,419 26,898 - - -LATAM 11 - - - -

Total discharges 127,678 101,087 77,872 62,356 59,332

Table 77.- Ecoefficiency of discharge

2016 2015 2014 2013 2012

(m3/employee) 13.63 13.90 12.10 10.25 8.92

(m3/€ mill. of invoicing) 27.68 28.84 27.36 26.69 20.86

66The only effluents discharged by Gamesa are linked to the use and consumption of sanitary water. Effluent values are calculated by taking

into account overall water consumption at each facility and subtracting water for industrial use, which in most cases is evaporated through

cooling towers. A factor of 80% is applied.



Table 78.- Quality of the water of discharged

2016 2015 2014 2013 2012

pH 7.6 7.6 7.6 7.6 7.6Suspended solids (mg/l) 67.5 44.4 58.0 56.0 58.5Chemical Oxygen Demand (COD) 186.0 130.2 124.8 146.1 90.6Biological Oxygen Demand (BOD5) 69.0 40.9 38.9 52.8 36.8Oils and fats 2.8 2.3 3.6 4.6 9.4Total phosphorus 4.1 2.7 3.3 3.7 3.6Total nitrogen 25.5 28.2 26.1 25.3 24.4Total chromium 0.8 1.4 1.0 0.0 0.3

G4-EN23 Total weight of waste by type and disposal method

The volume of waste amounted to 19,394 tons in 2016, 68% more than in the previous year, with a ratio ofhazardous waste generation to non-hazardous waste generation of almost 1:7.

The figure for the waste generated by employee and year was of 2 tons.

Approximately 54% of the hazardous waste was destined to recovery, reuse or recycling (38% in thepreceding year). For its part, the percentage destined to taking advantage of used materials reached 82% inthe case of non-hazardous waste.

Table 79.- Waste generation by type


Hazardous wasteEMEA 1,443 1,146 959 1,495 1,800USA - - - - 0.875APAC 39 32 30 21 65INDIA 865 138 1 14 266BRAZIL 16 - - - 3.6LATAM 0.1 - - - -

Total hazardous waste 2,363 1,316 991 1,530 1,896

Non-hazardous wasteEMEA 12,024 8,452 8,199 7,722 7,722USA - - - 121 121APAC 152 305 215 163 163INDIA 4,711 1,311 1,414 810 810BRAZIL 137 169 23 0 0LATAM 6 - - - -

Total non-hazardous waste 17,031 10,236 9,851 8,817 8,817

Total waste (hazardous and non-hazardous) 19,394 11,552 10,841 10,346 11,191

Table 80.- Ecoefficiency in waste management

2016 2015 2014 2013 2012

(t/employee) 2.07 1.58 1.68 1.70 1.68(t/€ mill. of invoicing) 4.20 3.29 3.80 4.42 3.93



Table 81.- Destination of waste by treatment method

2016 2015 2014 2013 2012

Hazardous wasteRecovery 1.55% 3.30% 3.07% 2.31% 3.34%Disposal 45.96% 61.95% 69.99% 78.36% 82.26%Reuse 37.10% 10.23% 1.61% 1.92% 1.87%Recycling 15.39% 24.52% 25.33% 17.41% 12.53%

Non-hazardous wasteRecovery 38.02% 45.57% 49.13% 0.27% 0.12%Disposal 17.83% 16.65% 16.77% 64.10% 55.73%Reuse 9.18% 5.67% 6.34% 2.13% 1.86%Recycling 34.98% 32.11% 27.76% 33.50% 42.29%

Table 82.- Most common waste


Hazardous wastePrepreg 232 192 232 473 818Catalyzed 70 39 41 77 115Contaminated metal containers 92 59 31 36 63Contaminated materials 1,008 227 149 287 181Semi-solid resins 108 57 44 66 61Used oil 73 81 84 88 92Contaminated plastic containers 39 40 28 54 54

Non-hazardous wasteGeneral garbage 3,841 1,646 1,445 1,498 1,860Paper and cardboard 710 393 281 353 336Wood 2,664 1,308 1,117 921 685Casting sand 5,232 4,015 4,825 3,009 2,689Scrap 2,428 1,774 1,637 1,536 2,868Polyethylene 723 430 150 372 426

G4-EN24 Total number and volume of significant spills

The environmental management system currently in place at Gamesa prevents accidental spills throughtechnical control elements (spill trays, loading and unloading areas, storage of chemical products, protectionof the rainwater network, etc.), along with management mechanisms. Should spills happen, Gamesa isequipped with environmental anomaly detection, reporting and correction methods which are aimed atpreventing this kind of episodes from being repeated.

There were no significant spills in 2016. Significant spills are construed as spills that cause damage to thefacility’s external surroundings and require giving notice to the appropriate public administration. However, atotal of two hundred thirty-eight (238) small spills of hydraulic and lubricating oil having a total volume of 2.8m3 (2,848 liters) were recorded. All of these were recorded, notified and corrected in accordance withinternal management processes. It was not necessary to adopt any exceptional corrective measures.

G4-EN25 Weight of transported, imported, exported or treated waste deemed hazardous under the terms of theBasel Convention Annex I, II, III and VIII, and percentage of transported waste shipped internationally

No waste was transferred across borders in 2016.

G4-EN26Identity, size, protected status and biodiversity value of water bodies and related habitats significantlyaffected by the organization’s discharges of water and runoff

No spills or run-offs into aquatic habitats that could have a significant impact on water resource availabilitywere recorded in 2016.



Products and services


Gamesa has defined ecodesign and the quality of its products and services as an essential pillar of itsExcellence Policy. That is why it has undertaken a “Commitment to improve products and services from thedesign to development stages on the basis of any environmental impacts detected throughout their life cycle,thereby avoiding the transfer of environmental impacts from one stage to another or from one category toanother”.

For Gamesa, ecodesign is a tool that improves a product, both in terms of its environmental impact as well asin efficiency and costs. It facilitates processes and provides greater possibilities when taking design decisions.

The company has pioneered ecodesign certification of its products according to the ISO 14006:2011standard. The G10X-4.5 MW, G114-2 MW and G128-5 MW platforms are included in Gamesa’s ecodesigncertification, electric vehicle recharging point. This achievement allows the environmental impact caused bywind turbines to be minimized throughout their life cycle: ranging from the design stage of all its components– a stage at which 80% of the impacts generated by a product, process or service are defined – to thematerials selection, industrialization, packaging and delivery, installation, operating, maintenance anddismantling stages.

G4-EN27 Extent of impact mitigation of environmental impacts of products and services

Gamesa aligns the development of new products with market needs, so they keep the cost of energy (CoE)competitive and need R&D investments which are in keeping with the business’s size. In this regard, futureproduct development whose time to launch does not exceed 18 months from prototype assembly will befocused on the evolution of the two current platforms, the 2 MW platform which has evolved to 2.5 MW andthe multimegawatt platform that is evolving from 4.5 MW to 5.5 MW. This evolution will ensure the Gamesaproduct portfolio remains one of the most competitive portfolios in the market (AEP/THM)67.

The Gamesa 5.5 MW turbine segment offers clear advantages to developers by optimizing the use ofcommon infrastructures, reducing the cost of civil works (by between 10% and 45% per MW) andenvironmental impacts, while making it possible to concentrate power at the best energy-producing sites(minimizing wake losses by 10% depending on the site).

G4-EN28 Percentage of products sold and their packaging materials that are reclaimed at the end of their usefullives by category

Gamesa has developed a process known as Life Cycle Assessment (LCA), which aims to assess theenvironmental loads associated to a product, process or activity, taking into account its entire life cycle. In2013, it concluded a project known as “Ecowind: Life cycle assessment of 1 kWh generated by an onshoreGamesa G90 wind farm”. This project’s main aim was to calculate the environmental impact associated toelectric wind energy generation in Europe and was carried out on a typical wind farm equipped with GamesaG90-2.0 MW turbines throughout its life cycle; in other words, from its creation to its final dismantling.

The report is in accordance with the UNE-EN-ISO 14040 and 14044 standards of 2006 and analyzes the entirelife cycle of the product and the processes associated to each stage. It defines the environmental impactsrelated to each phase, stage or unitary process, assessing which are more or less harmful, and serves as areference model for drawing up future designs and redesigns68.

This process allowed the environmental product declaration or EPD (Type III Ecolabel) for the G128-5.0 MW69

and G132-5.0 MW70

turbines to be obtained in 2015).

67AEP/THM: Annual Energy Production/Top Head Mass as a product competitiveness parameter

68www.gamesacorp.com/recursos/doc/rsc/compromisos/clientes/certificaciones-ohsas-y-i/informe-analisis-ciclo-de-vida-g90.pdf

69Environdec: http://environdec.com/en/Detail/epd705

70Environdec: http://environdec.com/en/Detail/epd706



Table 83.- Eco-profile of Gamesa wind turbines

Potential environmental impacts of 1kwhthroughout the life cycle

G90Tower (78 m)

G114Tower (80 m)

G114Tower (93 m)

G128(140 m hybrid)

G132Tower (95 m)

Acidification potential (AP) (g SO2 eq) 3.77 E-02 7.43 E-02 7.74 E-02 7.06 E-02 6.57 E-02Eutrophication potential (EP) (g PO4

=eq) 2.00 E-02 5.87 E-02 6.04 E-02 2.66 E-02 2.60 E-02

Global warming potential (GWP-100y) (g CO2 eq) 8.17 E-00 9.27 E-00 1.00 E-01 1.07 E-01 9.61 E-00Ozone depletion potential (ODP-20y)) (g CFC-11 eq) 1.16 E-06 7.33 E-07 7.80 E-07 1.02 E-06 8.69 E-07Ozone formation at ground level (g C2H4eq) 2.97 E-03 4.13 E-03 4.49 E-03 4.39 E-03 4.24 E-03

Fig 32.- Global warming potential (GWP-100y) duringthe life cycle of Gamesa wind turbines

Fig 33.- LCA GHG emissions of energy systems

(GWP expressed in gCO2 eq/kWh)71

Table 84.- Environmental impact selection

Use of resources of 1kwh throughout the lifecycle

G90Tower (78 m)

G114Tower (80 m)

G114Tower (93 m)

G128(140 m hybrid)

G132Tower (95 m)

Freshwater (m3) 4.50 E-05 4.17 E-05 4.40 E-05 2.79 E-05 2.55 E-05

Saltwater (m3) 3.64 E-06 3.03 E-06 3.27 E-06 3.27 E-06 2.69 E-06

Wood (g) 2.89 E-01 2.33 E-01 2.38 E-01 2.94 E-01 2.91 E-01Energy: nuclear (MJ) 2.21 E-02 2.00 E-02 2.15 E-02 2.85 E-02 6.19 E-05Energy: Crude oil (MJ) 4.78 E-02 4.53 E-02 4.74 E-02 1.14 E-00 9.42 E-01Energy: Lignite (MJ) 7.34 E-03 6.01 E-02 6.57 E-02 2.31 E-01 2.07 E-01Energy: Hard coal (MJ) 4.89 E-02 3.82 E-02 4.37 E-02 2.20 E-00 2.16 E-00Energy: Natural gas (MJ) 3.41 E-02 3.61 E-02 3.84 E-02 5.04 E-02 4.68 E-02Hazardous waste (non-radioactive) (g) 5.98 E-02 5.41 E-02 5.41 E-02 8.01 E-02 5.34 E-02Non-hazardous waste (landfill) (g) 8.57 E-00 6.47 E-00 7.20 E-00 1.15 E-01 7.69 E-00Non-hazardous waste (incineration) (g) 1.68 E-01 2.17 E-01 2.17 E-01 1.03 E-02 1.05 E-02Non-hazardous waste (recycling) (g) 2.60 E-00 2.09 E-00 2.42 E-00 1.45 E-00 1.77 E-00

71Source: 2011: Renewable Energy in the Context of Sustainable Development. In IPCC Special Report on Renewable Energy Sources and

Climate Change Mitigation.

9.829.27

10.0010.70

9.61

0

2

4

6

8

10

12

14

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G1

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G1

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G1

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80

100

120

140

160

180

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Nuclear Wind CSP PV

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Compliance


Gamesa defined regulatory compliance as one of its fundamental pillars in its Excellence Policy. The companyhas therefore made an undertaking to comply with any legal requirements which are in force concerningoccupational health and safety, environmental, energy efficiency and ecodesign matters, as well with anyproduct regulations which apply.

The certified environmental management systems the group is equipped with allows it to identify the legalrequirements which apply to its activities and assess its compliance thereof. Compliance reports are drawnup in cases where the management system has not yet been fully implemented.

G4-EN29 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance withenvironmental laws and regulations

Gamesa did not receive any kind of sanction in 2016 for having failed to comply with environmental laws andregulations.

Transport


Gamesa is equipped with procedures which set out the systematic processes to exercise appropriate controlover loading, unloading and transport operations of hazardous goods by land, sea and air carried out at thegroup’s centers with the organization’s own resources or those of subcontracted companies in order toensure suitable protection for people, goods and the environment, as well as to fulfill prevailing legislation.

G4-EN30Significant environmental impacts of transporting products and other goods and materials used for theorganization’s operations, and transporting members of the workforce.

The most significant impacts of the company’s activities are connected with greenhouse gas emissions, whichare described in the emissions indicator G4-EN 6 (p. 98) of this report.

General: Expenditures and investments


Gamesa is equipped with a management procedure for investments and expenditures, which are defined inkeeping with the criteria of Gamesa’s Management Control Department.



G4-EN31 Total environmental protection expenditures and investments by type

Table 85.- Environmental expenditures by type of expense

(€) 2016 2015 2014 2013 2012

Facility refurbishment 3,312 51,015 7,834 47,168 3,208Analysis 3,409 5,909 7,871 137,207 3,721

Safety Consultant72 1,726 2,135 0 8,260 5,249

Consultancy /Counseling 229,086 475 22,080 623,335 733,246Waste management 1,080,807 708,288 550,706 519,246 1,043,783Environmental monitoring plan 53,630 0 55,543 273,115 1,029,311Environmental management system 31,483 43,850 22,600 49,974 49,974Training (Note) 301,875 315,693 923,188 194,384Others - 0 0 57,024 -

Total environmental expenditure 1,403,454 1,113,547 982,328 2,638,518 3,062,875(Note: Due to changes made to the training management system in 2016, the costs associated to environmental trainingcannot be reported for the year.)

Supplier environmental assessment


Gamesa is equipped with screening procedures for new suppliers of both goods and services, through whichtheir environmental performance is assessed with a view to their acceptance as suppliers of the company. Itlikewise has management procedures and an assessment methodology for external materials suppliersdepending on the degree to which they have implemented a management system that ensures productquality in environmentally-friendly facilities that takes the health and safety of their employees into account.

G4-EN32 Percentage of new suppliers that were screened using environmental criteria

Reference is made to the detailed information on the supply chain’s sustainable development in SectionG4.12 (page 34).

G4-EN33 Significant actual and potential negative environmental impacts in the supply chain and actions taken

Reference is made to the detailed information on this indicator in Section G4.12 (page 34).

Environmental grievance mechanisms


Gamesa has procedures to ensure that internal and external communications on environmental, energyefficiency and occupational health and safety matters are efficiently conveyed across the organization’sdifferent levels, and between it and the outside.

Said procedures include local community participation and grievance mechanisms for any cases where suchcommunities could be affected by a project’s risks or adverse impacts, in which case a participation andconsultation process with them is set up (free from external manipulation, interference, coercion andintimidation), which is then carried out on the basis of accessible, comprehensible, pertinent and timelyinformation.

G4-EN34 Number of grievances about environmental impacts filed, addressed, and resolved through formalgrievance mechanisms

Gamesa did not receive any grievances or complaints on environmental issues in 2016.

72The subcontracting of the position of Safety Consultant came to an in 2014 and is now managed in-house.

CORPORATE RESPONSIBILITY REPORT 2016 | PART II. SPECIFIC STANDARD DISCLOSURESSection II.11 – SOCIAL DIMENSION

11A- LABOR PRACTICES AND DECENT WORK


II.11.- SOCIAL DIMENSION

II.11a.- LABOR PRACTICES AND DECENT WORK

G4-DMA Management approach: Labor practices and decent work

Gamesa shares the goal of improving the quality of life, since it believes in social and professionaldevelopment as an implicit component for its employees’ future and success.

It shall encourage employee training, particularly through the creation of job opportunities, as well as byavoiding any kind of discrimination, showing respect for diversity, promoting a safe healthy environment andfacilitating communications with the workforce.

Employment


Management of change in the organization, awareness of change and development, both personal andprofessional, of people are the ultimate objectives to provide a response to Gamesa’s Business Plan. ThisMission is developed on the basis of three strategic lines of actions:

The combination of these three lines of action, along with Business Plan’s key actions (efficiency, changemanagement and growth in key segments and markets) determine our key human resources processes andpolicies.

Working Environment

The working environment survey, which has a global scope covering all Gamesa employees, was initiatedonce again in April 2016. The survey was conducted through a computer tool available across theorganization (specific access points were made available for production personnel since the do not havetheir own PC or e-mail account).

The survey’s participation rate amounted to 55.4% of the workforce, which was considered highly positivefigure, since it was 1.5% higher than the participation rate obtained in 2011. Likewise, the results weresignificantly better on all the aspects taken into consideration from both an overall perspective as well as

• Geared to basic business processes, facilitating rapid decision-making.

• Lean, cross-cutting and flexible.

• Appropriate in size to its environment and ready to support growth.

• Geared to results and to improving customer satisfaction and financial strength.

• Regionalization of the organization. Granting autonomy (authority and responsibility) to localmanagement in the various regions, while at the same time ensuring alignment withcorporate policies.

• Detecting, retaining and developing talent and the necessary knowledge, also ensuring its

proper transmission.

• Identification and assessment of potential talent based on skills and contribution.

• Skills-based management.

• The health and safety of all Gamesa's people a priority.• Professional development which is appropriate to people's experience, contribution and

value.• Training for professional development.• Teamwork.

1. Development

of theorganization

2. KnowledgeManagement

3. People




when considering the different operating units’ evolution. The process of analyzing the results wascompleted in 2017 and work is now being done on designing the relevant action plan to be carried out in2017.

Fig 34.- Participation in the working environment survey Fig 35.- Overall satisfaction level

G4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender and region

In 2016, 61% of the new employee hires took place in India, where a new blade plant was built in Nellore. Atotal of 414 employees worked at said plant at the year-end. It should also be noted that 61% of the newemployee hires were young people up to 30 years of age.

A total of 600 job vacancies were published during 2016, and a total of 7,484 candidate applications werereceived for said vacancies. Of these applications, 26% corresponded to vacancies in Spain, where Gamesa isrenowned as a company that creates jobs, and 18.5% corresponded to India, where Gamesa is the leadingfirm in the renewable energy sector.

From the standpoint of equal opportunities, 26.3% of the candidates were women and 25% of the vacancieswere filled by women. The company’s corporate policy and procedures strengthen and make it easier tomove forward in the task of hiring women.

Table 86.- New hires within the social boundary

2016 2015 2014Men Women TOTAL Men Women TOTAL Men Women TOTAL

Total 2,531 244 2,775 1,419 167 1,586 716 97 813

By age<25 years 692 30 722 (26%) 403 23 426 (27%) 162 8 170 (21%)25-30 years 923 55 978 (35%) 517 64 581 (37%) 248 44 292 (36%)31-35 years 467 68 535 (19%) 267 38 305 (19%) 168 27 195 (24%)36-40 years 227 47 274 (10%) 125 30 155 (10%) 80 11 91 (11%)>40 years 222 44 266 (10%) 107 12 119 (8%) 58 7 65 (8%)

By regionEMEA (incl. Corporate) 393 131 524 (19%) 228 46 274 (17%) 108 35 143 (18%)USA 159 15 174 (6%) 88 8 96 (6%) 50 3 53 (7%)APAC 109 19 128 (5%) 140 23 163 (10%) 148 24 172 (21%)INDIA 1,670 24 1,694 (61%) 704 20 724 (46%) 277 2 279 (34%)BRAZIL 105 20 125 (5%) 222 43 265 (17%) 133 33 166 (20%)LATAM 95 35 130 (5%) 37 27 64 (4%) - - -

The number of voluntary resignations during 2016 amounted to 638, as opposed to 460 in 2015. Menaccounted for 93% of these resignations (593) and women 7% (45).

55%

54%

66%

0% 10% 20% 30% 40% 50% 60% 70%

2016

2011

2008

% Participation

80%

73%

68%

60% 65% 70% 75% 80% 85%

2016

2011

2008

% Overall satisfaction




Table 87.- Voluntary resignations

2016 2015 2014Men Women Men Women Men Women

No. of cumulative resignations by gender(M/W)

593 45 422 38 323 46

Breakdown by professional groupNo. of cumulative resignations: Executive 3 - - - 1 -No. of cumulative resignations:Management personnel

285 40 232 24 190 34

No. of cumulative resignations: Operatingpersonnel

305 5 190 14 132 12

No. of cumulative resignations: Others - - - - - -

Breakdown by age groupNo. of cumulative resignations: <25 years 143 2 88 5 62 3No. of cumulative resignations: 25-30 years 195 10 157 10 100 16No. of cumulative resignations: 31-35 years 130 19 91 14 79 13No. of cumulative resignations: 36-40 years 69 7 47 4 39 8No. of cumulative resignations: >40 years 56 7 39 5 43 6

Breakdown by regionNo. of cumulative resignations: EMEA 74 15 81 15 72 19No. of cumulative resignations: USA 49 2 57 3 39 6No. of cumulative resignations: APAC 50 10 83 11 88 15No. of cumulative resignations: INDIA 384 7 186 3 121 3No. of cumulative resignations: BRAZIL 16 7 9 3 3 3No. of cumulative resignations: LATAM 20 4 6 3 - -

G4-LA2Benefits provided to full-time employees that are not provided to temporary or part-time employees, bysignificant locations of operation.

Gamesa’s global benefits program includes the following: life insurance, temporary incapacity, accidentinsurance, health insurance, travel assistance and social welfare plans.

Any person having an employment relationship with Gamesa can form part of the insurable group. Theidentification and overall management of the social benefits provided in each country is done according tothe legislation, uses and customs of the country the employee is at.

Additionally, employees in Span can benefit from the Gamesa Flexible Compensation Plan (Gamesa FLEX),which allows each employee to design the composition of his/her own compensation by replacing part ofhis/her cash remuneration with certain products or services having tax advantages.

G4-LA3 Return to work and retention rates after parental leave, by gender

Table 88.- Parental leave and return to work

2016 2015 2014Men Women TOTAL Men Women TOTAL Men Women TOTAL

Total number of employeesentitled to parental leave (*)

7,435 1,668 9,103(100%)

5,725 1,546 7,271(100%)

4,972 1,459 6,431(100%)

Number of employees who havetaken parental leave

284 155 439(5%)

224 140 364(5%)

258 230 488(7%)




Labor/Management Relations


Labor relations between Gamesa and its employees are regulated by the legal regulations of each countryand such pacts and agreements as may have been reached with the workers’ representatives.

At the end of 2016, there were a total of 37 works councils in Spain, five of which held trade union electionsduring the year. Said works councils held 307 meetings and 17 collective bargaining negotiation meetings atoffices in Spain, which concluded with the signing of the first collective bargaining agreement for Gamesa’scorporate offices (published in the Official Journal of the State on August 4). Training is monitored in Spain bythe Training Board, which was set up in 2014 with the major trade unions in Spain (CCOO, UGT and ELA). ThisBoard met twice in 2016.

Similarly, regular meetings are held by the company and trade union federations or these federations’coordinators at Gamesa.

For their part, the Equality Committee held three meetings in 2016 and the Diversity Committee one.

The monitoring committee of the Gamesa Global Labor Agreement (an agreement signed with the majorSpanish trade unions [UGT, CCOO and ELA] and the global industrial trade union [IndustriALL Global Union]),which applies to all the group’s employees, held three meeting in 2016.

Active communications between the company and employees were likewise maintained in the othercountries:

In Mexico, all activities, including construction, operations and maintenance, are now covered by anagreement signed with the industry’s labor union SUTERM.

It should be noted that six agreement on remuneration, the working day and flextime were signed inBrazil.

Two collective bargaining agreements are currently in force in the United States, one for the FairlessHills services warehouse and the other for the Ebensburg center.

Lastly, communication channels have been kept open between the company and workers, in particular theGamesa intranet, with more than 1.3 million visits in 2016, the employees’ internal mailbox, and GamesaClub (4,583 sessions), Gamesa Flex (2,712 queries attended), and the Human Resources managementmailboxes for communications relating to the workforce.

Table 89.- Committees and dialog panels in Spain

2016 2015 2014 2013 2012

Works councils 37 36 35 34 37Meetings with committees 307 234 278 212 147Downsizing plans: Negotiation meetings - 16 24 37 65Downsizing plans: Monitoring meetings - 16 24 26 31No. of trade union elections 5 15 6 6 -No. of collective bargaining agreements signed 8 - 4 2 -No. of meetings with the Psychosocial Risk Board 1 4 5 4 -No. of meetings with the Diversity and EqualityCommittee

5 3 5 8 2




G4-LA4Minimum notice periods regarding operational changes, including whether these are specified in collectiveagreements

Concerning the minimum prior notice period for operational changes in Europe and Spain in particular,Gamesa goes beyond legal obligations and serves notice of such changes before the required notice periods.

In the rest of the world, Gamesa fulfills the notice periods set forth in each country’s specific legislation.However, if there are no regulatory requirements, Gamesa ensures its employees will be suitably informedabout any relevant operational change or changes which affects them in accordance with the company’sstandards

In the United States, the only legal requirement is to give two months’ prior notice in the event ofgroup layoffs.

In Brazil, the law sets forth a prior notice period of between 30 and 90 days in the case of collectivelayoffs and vacations.

There are no regulatory requirements on this matter in China, India and Mexico.

Occupational health and safety


Gamesa and the companies which form part of Grupo Gamesa promote an appropriate occupational hazardprevention policy and culture in order to ensure occupational health and safety, fulfillment of the legislationwhich applies in each country and the adoption of such preventive measures as are necessary and/orsuitable in each case.

The aim of this policy is to implement the commitment to continuous improvement in order to consolidateobservance of international practices and standards guided by criteria of excellence in applying anoccupational risk prevention system.

People’s health and physical safety is a corporate priority, implemented by means of the company’s variouspolicies and processes and provided with resources specifically earmarked for such purpose.

The constant reduction of accident frequency and severity rates is an objective of everyone who managestheir targets under the Gamesa Management by Objectives (GMBO) system.

Integrated Excellence Policy73

Through its Integrated Occupational Health and Safety, Environmental and Quality Policy, Gamesa has set thefull satisfaction of internal and external customers as a target for all its processes. In order to achieve this, ithas established a safe work environment, ensures maximum respect for the environment throughout the lifecycle of its products and adheres to an advanced quality system.

This path to excellence is based on the following pillars:

Occupational health and safety is more than a priority, it is a value.

Commitment to responsible action regarding the health of both people and the environment. Awareof its interaction with its surroundings, the company is committed to complying with prevailing legalrequirements dealing with occupational health and safety, the environment and energy efficiency, aswell with any product regulations which apply.

Creating and distributing wealth among shareholders, employees, suppliers, customers and thecommunities where it performs its activities. This commitment aims to prevent non-conformities atany step of the processes and is carried out in a way which is compatible with respect for and theimprovement and preservation of occupational health and safety, the environment, energy efficiencyand the quality of products and services through a commitment to continuous improvement.

Sense of responsibility. Occupational health and safety, respect for the environment, energyefficiency and quality requirements must be inherent to the organization. They should form anintegral part of each person and activity, particularly all those holding responsibility for a team.

73http://www.gamesacorp.com/recursos/doc/rsc/compromisos/clientes/certificaciones-ohsas-y-i/politica-excelencia-gamesa.pdf




Consolidated health and safety management program

The company has a global occupational health and safety management system in place which applies to itsglobal network of centers. Said health and safety management system was duly certified according to theOHSAS 18001 standard by TÜV Rheinland Cert GmbH.

The international OHSAS 18001 standards contribute to reducing occupational accident rakes and increasingproductivity by aiding compliance with prevention legislation and promoting a culture of prevention bymaking prevention an integral part of the company’s general systems.

Gamesa acts proactively to analyze the root causes of accidents and is equipped with management indicatorswhich show the attainment level of this working philosophy in day-to-day management, which was asfollows:

A single, global and standardized occupational health and safety management system, which appliesto the entire organization, with more than 100 professionals working in the area of occupationalhealth and safety and a service comprised of more than 70 external staff in charge of preventionfunctions;

The auditing team conducted 99 comprehensive audits in 2016 to reach an attainment level of90.83% of the annual schedule;

967 specific training actions on occupational health and safety out of a total of 1,032 actionsscheduled for 2016, amounting to an overall attainment level 94%. An additional 193 extraordinarytraining actions were carried out.

The efforts made to investigate all accidents and incidents led to a total of 3,482 health and safetyimprovement actions in 2016 through programs in different stages of completion, of which 95% werefully completed.

A total of 10,463 safety inspections and 4,380 preventive observations where scheduled which,together with the risk notifications and audits conducted in 2016 identified 7,473 new improvementactions, whose attainment rate stands at 92%.

96.6% of scheduled health screening check-ups were completed in accordance with the schedule laiddown.

A weighted degree of fulfillment of the annual health and safety management plan of 87.25%, for alloperational areas and geographic regions.

Table 90.- Management of the occupational health and safety program

2016 2015 2014 2013 2012

Comprehensive health and safety audits 99 71 58 33 37

Percentage fulfillment of the auditing program 90.8% 87.7% 89.6% 78.5% 71.2%

Specific health and safety training actions 967 1,727 829 422 1,948

Percentage fulfillment of the training action plan 100% 92% 96.8% 96.5% 96.5%

Health and safety improvement actions 3,482 2,112 1,168 1,658 2,553

Percentage completion of improvement actions 95% 95% 87% 85% 88%

Safety inspections 10,463 8,263 15,124 15,728 18,452

Preventive observations 4,380 9,166 3,008 2,510 3,068

Improvement actions detected 7,473 7,890 6,196 4,163 4,797

Percentage implementation of improvement actions 92% 94% 99.3% 98.0% 86.2%




G4-LA5 Percentage of total workforce represented in formal joint management-worker health and safetycommittees that help monitor and advise on occupational health and safety programs

Prevention Boards

Gamesa is equipped with formal procedures of a global scope to report environmental, energy efficiency andoccupational health and safety matters (Rule PBE-1-004).

The Prevention Boards are organized by work center and aimed at fostering initiatives on methods andprocedures to prevent hazards and at participating in the prevention policy’s planning, implementation andevaluation, as well as such other duties that may be assigned to them by prevailing legislation. These boardsare governed by regulations, the purpose of which is to govern the boards and their members in asystematic, orderly and precise fashion at all work centers.

The entire (100%) workforce at Gamesa centers in Spain, other countries in Europe and the rest of the worldare represented by their own Prevention Boards. The setting up of these boards ensures joint participation inthe design of the occupational risk prevention policy and in control over the implementation of measuresaimed at promoting improvements in working conditions.

External collaboration on occupational health and safety

Gamesa collaborated with and participated in numerous collaboration initiatives involving public and privateentities in 2016 in order to improve and share OHP practices:

Gamesa collaborates and share reflections with PRL Innovación, an association/forum set up bypublic and private organizations, which promotes of culture of innovation in the field ofprevention, since Games considers that this activity can and should be managed in a way whichcreates value for people and ensures it is fully aligned with the business’s goals.

Gamesa is member of the Fundación Industrial Navarra’s Occupational Health and Safety Panel.The foundation’s main aim is to promote technical and economic progress in Navarre, in additionto fostering business collaboration and relationships that enable a continuous interchange ofknowledge and relationships.

Gamesa actively participates in the Gipuzkoa Business Association’s Occupational HazardPrevention Learning Community (Comunidad de Aprendizaje de Prevención de Riesgos Laboralesde la Asociación de Empresarios de Gipuzkoa - ADEGI). This community allows enterprises tocollaboratively explore, identify and develop successful prevention management models andpractices by pooling their knowledge and experience.

Gamesa collaborated in the preparation and presentation of the Practical Labor Road Safety Guide(Guía Práctica de Seguridad Vial Laboral) in conjunction with the Segurbide Commission in theBasque Country, the Traffic Area of the Basque Country’s Traffic Department and the BasqueInstitute for Occupational Health and Safety (Instituto Vasco de Seguridad y Salud Laborales -OSALAN).

Gamesa collaborates with the Occupational Safety and Hygiene Administration and Institutes on aregular basis.

Collaboration with the Madrid Regional Institute for Occupational Health and Safety (IRSST) on anarticle dealing with “prevention management in globalization processes” for its digital bulletin.

Gamesa likewise took part in numerous workshops and conferences on workers’ occupational health andsafety:

In May 2016, Javier Guiral Alda, Gamesa’s Health & Safety and Environmental Manager, took partin a workshop on Innovation and Health and Safety Practices in the Wind Energy Industry organizedby the Wind Energy Business Association (Asociación Empresarial Eólica).

In October 2016, Gamesa participated in a workshop dedicated to sharing reflections on the pathto be followed to transform occupational health and safety management from the need for legalcompliance to the conviction of its multiple advantages, which involves having healthy people athealthy companies. This workshop was organized by Mondragon Corporación’s Joint PreventionService.

In December 2016, Mr. Ricardo Chocarro, EMEA CEO, personally took part in a workshop on the“benefits for companies where health and well-being are real values of its culture” with a paper on




Innovation and Creativity in OHP. The eThink! communication channel was presented at theworkshop after having celebrated its first anniversary. eThink! is an internal news channel onoccupational health and safety, the environment and quality.

Lastly, Gamesa collaborates closely with companies like CIE Automotive, KAEFER Servicios, Tecnalia,Ferrovial, Ingeteam y EDSSA to conduct benchmarking activities aimed at improving operating processes andsharing the outcomes of strategic actions guidelines.

G4-LA6Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number ofwork-related fatalities, by region and by gender

Accident indicator management is governed by an internal management rule which lays down standardcriteria for classifying, recording, notifying, investigating and analyzing incidents in order to determineunderlying deficiencies in the prevention system and any other factors which may cause or contribute toincidents occurring; identify the need to implement corrective actions; and identify opportunities forpreventive action and continuous improvement.

In 2016, Gamesa once again recorded its lowest ever accident rates. The rate of accidents involving sick leavefell by 21%, while the severity rate remained steady when compared to the preceding year. As for fatalities,two fatal accidents involving activities performed by contractors were recorded in 2016.

Table 91.- Frequency rate of accidents involving sick leave (FR)

2016 2015 2014 2013 2012

FR EMEA 2.42 3.12 4.42 2.09 2.13FR USA 1.02 0.00 0.00 1.02 3.57FR APAC 0.00 2.16 1.33 1.52 5.45FR INDIA 0.17 0.48 0.00 0.00 0.00FR BRAZIL 1.68 0.00 2.61 0.00 0.00FR LATAM 0.00 - - - -Total Frequency Rate 0.85 1.08 1.72 1.74 2.39

FR EMEA (ref. 200,000 hrs.) 0.48 0.62 0.88 0.42 0.43FR USA (ref. 200,000 hrs.) 0.20 0.00 0.00 0.20 0.71FR APAC (ref. 200,000 hrs.) 0.00 0.43 0.27 0.30 1.09FR INDIA (ref. 200,000 hrs.) 0.03 0.09 0.00 0.00 0.00FR BRAZIL (ref. 200,000 hrs.) 0.34 0.00 0.52 0.00 0.43FR LATAM (ref. 200,000 hrs.) 0.00 - - - -

Total Frequency Rate (ref. 200,000 hrs.) 0.17 0.22 0.34 0.35 0.48

Sick Leave Frequency Rate (FR) = (Total no. of accidents resulting in sick leave / Total hours of exposure) x 1,000,000, whichrepresents the total number of accidents involving sick leave per million hours worked. The conversion to 200,000 hours isused to bring it into line with other references used internationally. The factor of 200,000 is derived from 50 working weeks@40 hours for 100 employees.

Table 92.- Accident severity rate(SR)

2016 2015 2014 2013 2012

SR EMEA 0.077 0.085 0.141 0.061 0.072SR USA 0.026 0.000 0.000 0.001 0.120SR APAC 0.000 0.006 0.085 0.169 0.124SR INDIA 0.004 0.001 0.000 0.000 0.00SR BRAZIL 0,005 0,000 0,008 0,000 -SR LATAM 0.000 - - - -

Total Severity Rate 0.023 0.023 0.054 0.055 0.073

Severity Rate (SR) = (Number of days lost due to accident / Total hours of exposure) x 1,000, which represents the totalnumber of days lost per thousand hours worked. The calculation of days lost makes reference to working days, which arecounted as from the day following the accident.




Table 93.- Sick leave incidence rate (IR)

2016 2015 2014 2013 2012

IR EMEA 4.01 2.61 3.60 3.45 3.90IR USA. 2.27 0.00 0.00 0.16 9.78IR APAC 0.00 3.25 1.72 0.16 9.31IR INDIA 0.35 0.64 0.00 0.00 0.00IR BRAZIL 3.62 0.00 3.30 0.00 -IR LATAM 0.00 - - - -

Total Incidence Rate 1.81 2.20 3.27 3.78 4.51

Sick Leave Incidence Rate (IR) = (Total number of accidents resulting in sick leave / Total of workers) x 1,000, which isequivalent to the number of accidents involving sick leave per thousand people exposed.

Table 94.- Accident Hazard Rate (HR)

2016 2015 2014 2013 2012

HR EMEA 29.90 37.46 41.87 23.96 33.78HR USA 22.36 33.48 11.88 28.50 47.55HR APAC 2.54 9.72 9.33 4.57 19.63HR INDIA 7.83 3.84 8.53 5.51 10.37HR BRAZIL 14.28 7.18 10.42 88.42 -HR LATAM 3.49 - - - -

Total Hazard Rate 13.11 13.14 15.60 21.52 32.04

Hazard Rate (HR) = (Total number of accidents resulting in sick leave + occupational diseases + first aid (FA) + medicaltreatments (MT) + restricted work (RW) / total hours of exposure) x 1,000,000Hazard rate: including all incidents (with or without sick leave).

Table 95.- Accident lost day rate (LDR)

2016 2015 2014 2013 2012

LDR EMEA 15.40 17.02 28.25 12.21 14.32LDR USA 5.20 0.00 0.00 0.20 24.01LDR APAC 0.00 1.29 17.05 33.84 24.86LDR INDIA 0.80 0.19 0.00 0.00 0.00LDR BRAZIL 1.00 0.00 1.56 0.00- -LDR LATAM 0.00 - - - -

Total Lost Day Rate 4.60 4.58 10.84 11.00 14.70

Lost Day Rate (LDR) = (No. of days lost / Total hours of exposure) x 200,000

Table 96.- Occupational disease rate (ODR)

2016 2015 2014 2013 2012

ODR EMEA 0.745 0.170 0.177 0.159 0.071ODR USA 0.000 0.000 0.000 0.000 0.000ODR CHINA and APAC 0.000 0.000 0.000 0.000 0.000ODR INDIA 0.000 0.096 0.000 0.000 0.000ODR BRAZIL 0.000 0.000 0.000 0.000 -ODR LATAM 0.000 - - - -

Total Occupational Disease Rate 0.201 0.054 0.049 0.121 0.048

Occupational Disease Rate (ODR) = (Number of occupational diseases / Total hours lost) x 200,000




Table 97.- External personnel accident rate: construction, projects and maintenance

2016 2015 2014 2013 2012

Construction and project personnel: Frequency rate 3.74 3.32 2.82 4.17 4.39

Construction and project personnel: Frequency rate74 0.75 0.66 0.56 0.83 0.87

Construction and project personnel: Severity rate 0.08 0.09 0.12 0.10 0.09Maintenance personnel: Frequency rate 2.09 2.35 2.68 3.22 5.21

Maintenance personnel: Frequency rate75 0.42 0.47 0.54 0.64 1.04

Maintenance personnel: Severity rate 0.06 0.04 0.08 0.09 0.12

Table 98.- Absenteeism rate76

2016 2015 2014 2013 2012

EMEA 5.44% 5.11% 5.36% 5.10% 4.28%USA - - - - 5.94%APAC 0.24% 0.94% 1.45% 2.06% 1.50%INDIA 0.74% 0.42% 0.97% 0.49% 1.52%BRAZIL 0.67% 0.62% 1.46% 7.71% 6.62%

G4-LA7 Workers with high incidence or high risk of diseases related to their occupation

The majority of the companies belonging to Grupo Gamesa conduct preventive screening of their employees’health and their own medical services are responsible for carrying out regular medical check-ups.

In general terms, the company considers its workers are not exposed to occupational illnesses or work-related diseases that could be considered as having a high level of incidence or risk when performing theiractivities.

Health Screening

The company has standardized systems and general criteria to ensure health screening for all the company’spersonnel and establishes actions which allow it to:

Detect the effects of working conditions on health early;

Draw conclusions on the suitability of jobs for people;

Determine the need to apply or improve protection and prevention measures;

Identify workers who are especially sensitive to specific risks.

Firstly, health screening is scheduled (through specific protocols and annual scheduling) for all the group’semployees. Medical check-ups (initial, specific, periodic and/or after a prolonged absence) are then carriedout. Lastly, the results are assessed and the aptitudes of employees for each work post are adapted. This isdone for all the group’s employees.

74Per 200,000 hours

75Per 200,000 hours

76Calculation of the absenteeism rate is defined as the number of hours lost / number of hours worked. This criterion is applied in Europe

and the rest of the world, China and India. In the case of the United States, absenteeism is defined as “the total of scheduled hours of work

which have not been worked” due to the particular characteristics of this market. In all cases, the figures refer to absenteeism rates of

direct labor at production sites.




Evaluation of psychosocial risks

Gamesa and employee representatives have begun working on an action plan to optimize the potential risksituations identified in the psychosocial risk study conducted in September 2014. Said study was based onthe outcomes of the surveys conducted on employees, a process which had a participation rate ofapproximately 64%, thus demonstrating the great interest it aroused and which ensures the study’s highdegree of reliability.

The methodology used was developed by the National Institute for Health and Safety in the Workplace andevaluates “aspects of the design and organization of work and its social and organizational contexts thatmight be psychologically or physically harmful”, producing potential risk indicators of this nature with a viewto preventing possible health problems among the Gamesa workforce.

More specifically nine work aspects were analyzed in the study:

Five of them showed clearly satisfactory results, namely: work hours, autonomy, psychologicaldemands, variety/contents of the work, and relationships and social support.

Two were identified as a priority: the demands made by tasks, their difficulty and the degree ofsharing; and the need to clearly define the functions to be performed, together with the degree ofattention to workers’ interests.

Both the project’s detailed assessment and the subsequent phases (action plans and their deployment andmonitoring) will be carried out jointly by employee representatives and management (through the variousbodies involved, including: Occupational Health Committees, Prevention Boards and Project Group) underthe supervision of Gamesa’s Joint Prevention Service. The company and the trade unions will also startpreparing to extend this study to the rest of Gamesa’s work centers in Spain.

G4-LA8 Health and safety topics covered in formal agreements with labor unions

The Prevention Boards are the bodies in charge of coordinating and monitoring the implementation ofpreventive principles and procedures in close collaboration with the Gamesa Joint Prevention Service, towhich occupational health and safety management plans are submitted. All the work centers andadministrative units of the companies that have signed collective bargaining agreements are assigned to localhealth and safety committees. There are 25 such committees, all of them established in accordance with theOccupational Hazard Prevention Act, with parity of representation between management and workers. Saidcommittees met at least quarterly in 2016 and were the main bodies for consultation, participation andcontrol as regards the occupational hazard prevention system, being the forum where formal agreementswith the labor unions on these matters were reached.

As a general rule, formal agreements and negotiations with the trade unions are established at a local level.These agreements cover topics connected with occupational health and safety, either because such issuesare regulated in the country in question or because the criteria, indicators and requirements of Gamesa’shealth and safety management model have been included in the negotiation process. Additionally, there istrade union representation through the Prevention Boards where the labor framework allows it (e.g. Spain)or, failing that, there is always a workers’ representative to deal with matters and agreements which includeamong other issues:

Occupational accident data;

Personal protection equipment; Participation of workers’ representatives in inspections, audits and accident investigations connected

to health and safety;

Training and education on occupational health and safety;

Grievance mechanisms, observation of unsafe conditions, etc.; Right to reject dangerous work;

Periodic inspections.




Training and Education


Gamesa has global personnel recruitment policies and processes to identify and define all the milestones ofthe recruitment process and ensure the optimization of its various stages, including: recruitment, candidateassessment tools, hiring excellent professionals and integrating them into their positions.

The process ensures that no candidate is discriminated against at any stage of the recruitment process due toreasons of gender, age, race, religion, beliefs or opinions. The assessment criteria exclusively addressprofessional requirements, ensuring that knowledge, capacities and abilities are assessed. The fulfillment ofprevailing legislation on the recruitment of the disabled and the implementation of actions to do away withany kind of forced or compulsory labor by eliminating child and compulsory labor to pay back debts andensure no other kind of coerced labor exists is likewise ensured.

The first edition of the Gamesa Awards was announced in 2016. This initiative was conceived to recognizethe contribution made by people to the creation of a culture committed to the continuous improvement ofprocesses and innovation by granting awards to the best practices carried out in the preceding year in sixcategories: Quality Achievement, HS&E, Product & Process Development, Best Performance Improvement,Customer Service and Community.

G4-LA9 Average hours of training per year per employee by gender, and by employee category

A total of 338,434 hours of training were recorded for the year’s balance.

Table 99.- Hours of training77

2016 2015 2014 2013 2012Men Women TOTAL Men Women TOTAL TOTAL TOTAL TOTAL

Hours of training 285,572 52,862 338,434 149,930 25,352 175,282 119,968 45,553 183,184Executives 0.4% 0.1% 0.4% 0.50% 0.10% 0.60% 1.28% 0.10% 1.00%

Managementpersonnel

31.1% 12.0% 43.1%28.80% 6.10% 34.90% 21.89% 30.00% 45.00%

Operating personnel 52.9% 3.5% 56.4% 56.40% 8.30% 64.50% 76.83% 69.90% 54.00%

Training rate78 42.7 32.5 40.7 28.42 16.99 25.90 19.31 7.49 23.59

CORPORATE 35.2 47.4 39.3 - - - - - -EMEA 28.4 29.9 28.8 26.40 16.38 23.54 16.64 10.71 27.85USA 66.0 24.6 59.5 60.25 15.33 52.96 39.57 1.64 30.52APAC 9.9 10.0 9.9 21.21 21.49 21.28 12.27 0.01 5.31INDIA 63.1 15.6 62.2 28.87 14.83 28.50 29.39 - 10.52BRAZIL 48.9 41.2 47.6 26.29 20.01 25.12 10.63 0.44 -

77The final distribution of hours of training by professional category, training participation rates, and the breakdown of training actions by

region have had to be estimated due to the lack of segregated data for all training actions.78

Average number of hours of training per employee per year.




Gamesa University

Gamesa maintains a specialized training center known as the Gamesa University79. It is a resource aimed atensuring ongoing training to cover the needs arising from constant technological advances and innovations inwind energy, and to benefit customers by increasing up-time of their machines, thus obtaining greaterbenefits in energy generation and reducing future costs. It is therefore intended of offer internal and externaltraining, which is reflected in the hours of training given to employees and external people. A total of 301were provided with training in 2016.

This resource has various training centers in the US, China, India and Mexico, markets with sufficient businessvolumes to be able to replicate the central training center located in Navarre, Spain. All the centers haveteams of trainers, including full-time specialists and specialists in each component, with the participation ofGamesa suppliers.

In order to serve Gamesa’s entire structure and to cover training globally, work is being done on in-housestandards and new industry standards. A diversified methodology is applied (classroom training, onlineplatforms, video streaming and simulators) and a range of 55 courses are available, specializing in theGamesa 850 kW, Gamesa 2.0-2.5 MW and Gamesa 5.0 MW platforms and related systems, such asmechanical, electrical, electronic, hydraulic, construction, assembly, maintenance, etc. systems.

Alternatives like local technical colleges, online methodologies, video training, etc. are sought in countrieswhere implementation at a lesser scale is needed, but which are expected to increase their workforce.Trainers are continuously traveling to other countries to give training and conduct wind farm monitoringlocally on projects of a lesser scale and in order to cut down on personnel traveling expenses.

The launch of the first “Gamesa 360 - Finance” module in 2016 should be highlighted. This module providesbasic training on the concepts, terminology and other essential aspects needed to understand financialstatements and the company’s worth.

G4-LA10Programs for skills management and lifelong learning that support the continued employability ofemployees and assist them in managing career endings.

Gamesa has implemented an SAP Success Factors talent management tool known as GATE (Gamesa TalentManagement), which was led by the Human Resources Department. Individual development plans foremployees are set through this tool. The aim of such plans is to contribute to personal growth and make thedevelopment of competencies and skills possible for each employee with a view to ensuring the BusinessPlan’ fulfillment. On the basis of these plans, annual training plans are designed, which are monitored jointlyin GATE by the employee, the manager and the Human Resources Department. The Human ResourcesDepartment is ultimately responsible for conducting the overall monitoring of all the training given.

In addition to individual development plans, Gamesa also has other programs intended to develop talent:

High potential program. Detecting high-potential talents in order to accelerate their developmentand training.

The Gamesa Leadership Program, the purpose of which is to develop key personnel’s skills by meansof carrying out multifunctional projects of a markedly international scope.

The Gamesa Premium Scholarship Program, which focuses on recruiting young graduates (interns)and assigning them to a multifunctional project so they can acquire the knowledge and develop theskills needed for them to join the company, thus ensuring success in attracting talent.

In-house mentoring program, which is aimed at key personnel with high development potential.

Gamesa 360: in-house training courses focused on technical training and at the same time deepeningknowledge about Gamesa’s business model and organizational processes. These are eminentlypractical courses based on the case study methodology.

Global Course Catalog containing more than 100 courses divided into four large thematic blocks: SoftSkills, Technical Skills, Health & Safety and Languages.

79Link: http://www.gamesacorp.com/recursos/doc/productos-servicios/operacion-y-mantenimiento/facultad-gamesa.pdf




In addition, Gamesa has an international mobility program which is a result of the company’s firmlyconsolidated globalization, given that more than 90% of its business is located outside Spain. The companyalso employs a large team of professionals with extensive international experience who are backed by a veryknowledgeable management team with experience in mobility issues.

Workers are assigned to a work center outside their country under the International Mobility Program. Atotal of 1,100 international short-term assignments (trips lasting between 15 days and 1 year) to 34 countrieswere managed in 2016, along with 124 long-term assignments (trips exceeding 1 year).

Table 100.- International mobility (international assignments)

2016 2015 201480

Long-

term ISP

81Short-

term ISP

Total Long-termISP

Short-termISP

Total Long-termISP

Short-term ISP

Total

EMEA 22 531 552 6 353 359 4 550 554USA 12 22 34 4 10 14 - 47 47APAC 21 155 156 17 117 134 - 48 48INDIA 7 54 61 6 38 44 - 32 32BRAZIL 31 100 131 31 144 175 10 112 122LATAM 31 238 269 26 216 242 - - -

Total internationalmobility

124 1,100 1,224 90 878 968 14 789 803

G4-LA11Percentage of employees receiving regular performance and career development reviews, by gender andby employee category

Table 101.- Personnel subject to performance assessment: by geographic areas

2016 2015 2014 2013 2012

Performance assessment: EMEA (includingCorporate)

2,745 (63%) 2,567 (63%) 2,815 (68%) (*) 2,613 (67%)

Performance assessment: USA 217 (49%) 211 (58%) 173 (49%) (*) 212 (6%)Performance assessment: APAC 407 (59%) 437 (71%) 272 (49%) (*) 302 (8%)Performance assessment: INDIA 1,765 (62%) 837 (53%) 784 (82%) (*) 707 (18%)Performance assessment: BRAZIL 252 (46%) 175 (34%) 115 (56%) (*) 49 (1%)Performance assessment: LATAM 202 (83%) 109 (97%) - - -% employees subject to assessment: 60% 60% 65% (*) 58%

Total number of personnel subject to assessment 5,588 4,336 4,159 (*) 3,883

(*) The performance assessment was not carried out in 2013. However, it resumed once again in 2014 and conducted everytwo years.

80Long-term ISP: Minimum international assignment lasting between one and three years, which may be extended to five years where service

needs require it.81

Short-term ISP: International assignment lasting between 15 days and one year.




Diversity and equal opportunities


As provided by the Gamesa Code of Conduct, the company includes equality, cultural diversity, the fight anddiscrimination and support for equal opportunities in the management of its human resources and, morespecifically, ensures equal opportunities in all its processes (recruitment, promotion, etc.). Fulfillingprevailing legislation in diversity management is therefore a priority for Gamesa and it is very aware of thelocal legislation of each country where it has a presence.

Policy and commitments

Gamesa has a Diversity and Inclusion Policy82 in place, the principles of which apply to all geographic regionswhere Gamesa is present. It aims to ensure equality and inclusion and avoid any kind of discrimination basedon race, gender, civil status, ideology, political opinions, nationality, religion or any other personal, physicalor social characteristic.

The Diversity Committee, comprised of all the regions’ Human Resources managers, oversees its fulfillmentin a working environment that fosters dignity and respect for all.

Equality Plan

Observance of the Organic Act on the Effective Equality of Men and Women is reflected in the secondGamesa Equality Plan. Gamesa signed the first Equality Plan together with its trade union representatives inSeptember 2010. This plant set the essential bases for working on equality issues. In September 2014,Gamesa reaffirmed its undertaking to diversity and equal opportunities for men and women once more bysigning the Second Equality Plan, which was registered in the Official Journal of the State83 on October 6,2014, which made improvements to continue advancing in this issue.

The Equality Plan in force is based on seven axes of action:

Culture and communication

Recruitment

Training and professional development

Remuneration

Work-life balance and shared responsibilities

Prevention of harassment in the workplace

Support for women who are victims of gender-based violence

Each axis has several objectives to be met and specific actions to be taken to do so. These objectives andactions are contained in a timetable specifying areas of responsibility and committed dates for thecompletion of each action.

Within the framework of the Equality Plan, two conciliation measures in addition to the ones already inexistence were agreed in 2016:

The possibility of doing telework as from the 32nd week of pregnancy, provided it is compatiblewith the position’s duties.

The uneven distribution of the working day in the event of legal guardianship, thereby ensuring adaily presence, provided the position’s duties and the work center’s circumstances allow it.

In 2015, Gamesa renewed its adherence to the Diversity Charter and signed three agreements with theMinistry of Health, Social Affairs and Equality to foster a balanced participation of women and men on theBoard of Directors in order to increase the presence of women holding management positions and promote

82See link: http://www.gamesacorp.com/recursos/doc/accionistas-inversores/gobierno-corporativo/politicas-corporativas/politica-de-

diversidad-e-inclusion.pdf83

See link: http://www.gamesacorp.com/recursos/doc/capital-humano/nuestras-personas/plan-de-igualdad-gamesa.pdf




awareness of gender violence and its victims’ integration into the labor force. These agreements remained inforce in 2016.

Harassment protocol

Gamesa has a protocol stipulating how to prevent harassment in the workplace with the aim of preventingthe occurrence of sexual, gender-based and/or psychological harassment, which offends dignity, is harmfulto the working environment and has undesirable effects on people’s health, morale, confidence and self-esteem.

This protocol defines the various forms of inappropriate conduct and the specific means available forpreventing them, as well as the channels through which anyone who suffered from such conduct can reportit or complain about it. Said protocol has also set out a quick and efficient investigation procedure that iscarried out should this kind of conduct be reported. This procedure ensures confidentiality and conceals theidentity of the people thus affected, as well as of anybody else involved in the process.

Measures taken to foster diversity:

Several initiatives to foster diversity and equality were carried out during the year, both in Spain and abroad,including:

Renewal (2015-2017) of the endorsement of the Charter of Diversity, promoted by the DiversityFoundation, an initiative driven by the European Commission and the Spanish Ministry of Equalitywhereby signatory companies state they comply with standards and rules in force on equalopportunities and anti-discrimination and adopt the basic guiding principles established in thedeclaration.

Signing of a collaboration agreement with the Ministry of Health, Social Affairs and Equality topromote the balanced participation of women and man on boards of directors.

Signing of a collaboration agreement with the Ministry of Health, Social Affairs and Equality toincrease the presence of women in executive positions and management committees.

Signing of a collaboration agreement with the Ministry of Health, Social Affairs and Equality to fosterawareness about gender violence and its victims’ insertion into the labor force.

Additionally, Gamesa sponsored a women’s organization in the United States linked to the AWEA84 calledWomen of Wind Energy (WoWE) in 2016. This association promotes the training, career development andprogress of women in order to foster diversified workforces in the renewable energy sector.

These new initiatives are in addition to Gamesa’s endorsement of the Declaration of Women’sEmpowerment Principles since 2010. These principles were drawn up through a multilateral consultativeprocess under the direction of the United Nations Development Fund for Women (UNIFEM) and the UnitedNations Global Compact and offer a gender-based perspective which allows ongoing initiatives to bemeasured and analyzed. This scenario covers all the business or social activities aimed at eliminatingdiscrimination, marginalization and exclusion in spite of equality between men and women being a universalprinciple recognized as a fundamental human right that cannot be violated.

84Link: http://www.womenofwindenergy.org/corporate-sponsor.html




G4-LA12Composition of governance bodies and breakdown of employees per employee category according togender, age group, minority group membership, and other indicators of diversity.

Table 102.- Workforce diversity indicators

(at December 31) 2016 2015 2014 2013 2012

Distribution by genderMen 7,680 (82%) 5,725 (79%) 4,972 (77%) 4,641 (76%) 5,068 (76%)Women 1,687 (18%) 1,546 (21%) 1,459 (23%) 1,438 (24%) 1,578 (24%)Breakdown by professional group

University graduates 4,994 (53%) 4,417 (61%) 4,022 (63%) 3,664 (60%) 3,795 (57%)Non-university graduates 4,373 (47%) 2,854 (39%) 2,409 (37%) 2,415 (40%) 2,851 (43%)

Breakdown by age groupsEmployees aged <25 years 856 (9%) 459 (6%) 223 (3%) 162 (3%) 166 (2%)Employees aged 25-30 years 1,906 (20%) 1,321 (18%) 1,138 (18%) 1,125 (18%) 1,408 (21%)Employees aged 31-35 years 2,172 (23%) 1,777 (24%) 1,705 (27%) 1,704 (28%) 1,932 (29%)Employees aged 36-40 years 1,989 (21%) 1,734 (24%) 1,601 (25%) 1,465 (24%) 1,471 (22%)Employees aged > 40 years 2,444 (26%) 1,980 (27%) 1,764 (27%) 1,623 (27%) 1,669 (25%)

Breakdown by nationalitySpanish 43.9% 52.9% 59.6% 61.9% 64.9%China 6.8% 8.4% 8.9% 8.4% 7.7%India 30.1% 21.6% 16.0% 13.7% 12.2%American 4.2% 4.3% 4.7% 5.9% 6.9%Brazilian 5.3% 6.5% 4.2% 1.3% 1%Mexican 1.8%Other 5.1% 6.4% 6.6% 8.9% 7.4%

Not reported 2.8%

Other diversity indicators (Spain only)Employees with disabilities > 33% 21 20 12 12 18Management personnel with disability > 33% 8 9 6 5 5Total number of personnel with disabilities > 33% 29 29 18 17 23Amount of offsetting measures (€) 2,606,982 2,188,551 694,871 596,124 -

At a national level (Spain), the average number of people employed by Grupo Gamesa having a disabilityequal to or greater than 33% stood at 29 in 2016, twenty-one employees and eight management staff. Theoffsetting measures applied in 2016 amounted to €2,606,982 through contracts for the provision of productsand services from special employment centers.




Table 103.- Employees by diversity category

(at December 31) 2016 2015 2014 2013

Directors 12 12 10 10Men 10(83%) 9(75%) 9(90%) 9(90%)Women 2(17%) 3(25%) 1(10%) 1(10%)Aged 36-40 1 (8%)Aged >40 years 11 (92%) 12 (100%) 10 (100%) 10 (100%)

Senior management 5 5 5 5Men 5(100%) 5(100%) 5(100%) 5(100%)Women 0 (0%) 0 (0%) 0 (0%) 0 (0%)Age group < 25 years - - - -Age group 25-30 years - - - -Age group 31-35 years 1(20%) 1(20%) -Age group 36-40 years 1 (20%) - - -Aged >40 years 4 (80%) 4 (80%) 4 (80%) 5 (100%)

Executives 133 99 100 84Men 119 (89%) 87 (88%) 90 (90%) 78(93%)Women 14 (11%) 12 (12%) 10 (10%) 6 (7%)Age group < 25 years - - - -Age group 25-30 years - 1 (1%) - -Age group 31-35 years 4 (3%) 3 (3%) 4(4%) 4 (4.8%)Age group 36-40 years 28 (21%) 15 (16%) 10(10%) 12 (14.3%)Age group > 40 years 101 (76%) 81 (85%) 86(86%) 68 (80.9%)

Management personnel 4,865 4,312 3,865 3,611Men 3,759 (77%) 3,321 (77%) 2,961 (77%) 2,739 (76%)Women 1,106 (23%) 991 (23%) 904 (23%) 884 (24%)Age group < 25 years 192 (4%) 178 (4%) 125 (3.2%) 56 (1.5%)Age group 25-30 years 837 (17%) 699 (16%) 571 (14.8%) 554 (15.3%)Age group 31-35 years 1,181 (24%) 1,089 (25%) 1,070 (27.7%) 1,071 (29.6%)Age group 36-40 years 1,222 (25%) 1,145 (27%) 1,079 (27.9%) 1,010 (28.0%)Age group > 40 years 1,433 (29%) 1,201 (28%) 1,020 (26.4%) 920 (25.6%)

Employees 4,363 2,854 2,461 2,379Men 3,796 (87%) 2,311 (81%) 1,916 (78%) 1,832 (77%)Women 567 (13%) 543 (19%) 545 (22%) 548 (23%)Age group < 25 years 664 (15%) 281 (10%) 98 (4.0%) 106 (4.5%)Age group 25-30 years 1,069 (25%) 621 (22%) 567 (23.0%) 569 (23.9%)Age group 31-35 years 987 (23%) 684 (24%) 630 (25.6%) 622 (26.1%)Age group 36-40 years 738 (17%) 574 (20%) 512 (20.8%) 443 (18.6%)Age group > 40 years 905 (21%) 694 (24%) 654 (26.6%) 639 (26.9%)




Equal Remuneration for Women and Men


Gamesa construes the development of a suitable remuneration strategy as a key management tool topromote professional development, equal opportunities, teamwork, the working environment and employeesatisfaction.

Grupo Gamesa’s remuneration model is in line with its Code of Conduct and is based on the principle ofequal opportunities. It avoids any kind of discrimination and ensures fulfillment of the labor legislation whichapplies in all the countries where it operates.

Grupo Gamesa’s remuneration model advocates integrating all the elements which create value foremployees under the notion of “Total Compensation”, under which professional expectations, workingconditions, the organization of work and even the values of Grupo Gamesa constitute a differential elementthat makes a job better and more desirable, while also increasing motivation and exerting a decisiveinfluence of competitiveness.

The elements upon which Grupo Gamesa sustains the total compensation strategy are as follows:

a. Monetary remuneration, which recognizes the position’s responsibilities and the person’scompetency.

b. Social benefits, which complement the compensation package’s attractiveness and are aimed atprotecting the person’s health and financial security in the long term.

c. Talent development, which is focused on professional development, supporting values and aculture of developing competencies and skills.

d. Conciliation and equality measures, which develop new ways of organizing work that are moreflexible and aimed at motivating and increasing professionals’ commitment by contributing to animprovement in their quality of life and making their work and personal lives compatible.

G4-LA13Ratio of basic salary and remuneration of women to men by employee category, by significant locations ofoperation

The following table shows the salary ratio between men and women within the corporate boundary. Whilethe data might suggest a contradiction with the management approach described above, the differencesbetween salaries of men and women are the result of the way the structure of the workforce has evolved,not of any discriminatory policy, since each professional category groups together different professionallevels having different proportions of men and women.

Table 104.- Ratio of salaries between men and women within the corporate boundary

EMEA APAC BRAZIL USA INDIA LATAM

2016Executives n.a. n.a. n.a. n.a. n.a. n.a.Middle management and qualified technicians 1.17:1 1.34:1 n.a. n.a. n.a. 1.30:1Skilled workers and support personnel 0.99:1 0.68:1 n.a. n.a. n.a. 1.45:1

2015Executives n.a. n.a. n.a. n.a. n.a. n.a.Middle management and qualified technicians 1.14:1 1.35:1 n.a. n.a. n.a. 1.44:1Skilled workers and support personnel 0.98:1 0.66:1 n.a. n.a. n.a. 1.81:1

2014Executives n.a. n.a. n.a. n.a. n.a. -Middle management and qualified technicians 1.18:1 1.20:1 1.34:1 n.a. n.a. -Skilled workers and support personnel 1.03:1 0.58:1 0.74:1 n.a. n.a. -

With regard to this information, it should be pointed out that no ratio is applied for managers since womenonly account for 10% of this group, a figure which is not considered sufficiently significant to provide areliable ratio. The same applies to India, where women account for only 2% of the workforce, and to the USwhere the percentage of women is 16% and Brazil where it is 20%.




Supplier Assessment for Labor Practices


Gamesa’s management approach to procurement practices is described under indicator G4-12 (p. 34)“Description of the supply chain” in this report. New suppliers are assessed in accordance with the abovemanagement approach, and any significant risks relating to labor practices are managed through the qualityprocesses in place and regular audits.

G4-LA14 Percentage of new suppliers that were screened using labor practices criteria


G4-LA15 Significant actual and potential negative impacts for labor practices in the supply chain and actions taken


Labor Practices Grievance Mechanisms


As a general rule, Gamesa promotes amicable resolution of labor disputes.

G4-LA16Number of grievances about labor practices filed, addressed, and resolved through formal grievancemechanisms

A total of 56 conciliation procedures and 232 trials (92 in Brazil, of which 91% involved grievances aboutsubcontractors’ workers) were dealt with in 2016.


11b- HUMAN RIGHTS


II.11b.- HUMAN RIGHTS

G4-DMA Management approach: Human rights

Gamesa has made an explicit undertaking to defend human rights, which is included and set out in detail inthe following codes approved by the company’s Board of Directors:

The Grupo Gamesa Code of Conduct, which has an incidence on i) respect for human rights and publicfreedoms ratified by the company’s application of the United Nations Global Compact’s contents, whichGamesa formally endorsed on December 21, 2004; ii) the conservation of natural environment where itperforms its activities; iii) collaboration in the sustainable development and well-being of the communitieswith which it has a relationship; and IV) the constant promotion of equal opportunities. It is thereforecommitted to observing minimum international standards on the protection of the fundamental rights andfreedoms of the people affected by its operations and, more specifically, the United Nations Norms on theResponsibilities of Transnational Corporations and Other Business Enterprises with regard to human rights,the guidelines of the OECD, the Tripartite Declaration of Principles Concerning Multinational Enterprises andSocial Policy of the International Labor Organization (OIT/ILO) and the Women’s Empowerment Principles ofthe United Nations Development Fund for Women (UNIFEM).

Gamesa’s Suppliers Code of Conduct sets out the rules to ensure working conditions in the company’s supplychain are safe, that workers are treated decently and with respect and that business transactions areethically, socially and environmentally responsible (which are also included in the General ProcurementTerms and Conditions and procurement contracts and agreements).

Similarly, the Corporate Social Responsibility Policy, approved by the Board of Directors, covers respect forhuman rights, particularly any right the violation of which would degrade employees, and rejects child laborand forced or compulsory labor. Gamesa also has other policies which complement the CSR policy in thedefense of human rights, such as the Diversity and Inclusion Policy and the Supplier Contracting andRelationship Policy.

Investments


The codes and policies explained above also apply to the investments made by Gamesa to ensure theystrictly adhere to the criteria on respect for human rights. There is no record of any external or internalactions that contravene these rights.

G4-HR1 Total number and percentage of significant investment agreements and contracts that include humanrights clauses or that underwent human rights screening

There were no significant investment agreements in 201685 that could endanger the protection of humanrights, affect the company’s reputation or the stability of such investments.

85Significant investments are construed to be any that must be disclosed as Relevant Disclosures to the National Securities MarketCommission (CNMV), and any information the knowledge of which could reasonably affect an investor to buy or transfer securities orfinancial instruments and which could therefore noticeably affect their listing in the secondary market will be deemed as such.


11b- HUMAN RIGHTS


G4-HR2 Total hours of employee training on human rights policies or procedures concerning aspects of humanrights that are relevant to operations, including the percentage of employees trained

Gamesa has conducted a significant ongoing training activity on the Code of Conduct in general and humanrights, particularly since 2009.

Additional information on this indicator is indicated in Section G4-57 (page 78)

Non-Discrimination


Gamesa has made an explicit undertaking to defend human rights, which is reflected in its Overall CorporateSocial Responsibility Policy and in other complementary policies, such as its Diversity and Inclusion Policy.

Gamesa’s Board of Directors approved the company’s Diversity and Inclusion Policy in 2014. Said policyrecognizes that the company’s employees come from a variety of cultures and ethnic groups and havedifferent beliefs and languages, and that this rich diversity is what makes Gamesa a more innovative, richerand more sensitive company committed to society. Furthermore, in said policy Gamesa ensures equality,inclusion and non-discrimination due to gender, civil status, race, ethnic origin, color, nationality, disability,sexual orientation, religion or age. The company is equipped with mechanisms aimed at detecting potentialincidents of discrimination, which are described in Sections G4-DMA and G4-58 (p.79).

The undertaking on equal opportunities, respect for diversity and non-discrimination sets the bases forGamesa’s human resources management. The company currently has specific targets on women’srepresentation on the Board of Directors – at least 30% by 2018 –, management teams and executivecommittees for the coming years. It also has an action plan in place to make the principle of equalopportunities real and effective by establishing measures to foster promotion and increase the presence ofthe gender having less representation.

Further information on Gamesa’s stance and the initiatives it has carried out on equality issues can be foundon page 131.

G4-HR3 Total number of incidents of discrimination and corrective actions taken.

The company is equipped with mechanisms aimed at detecting potential incidents of discrimination (seedescription in Sections G4-DMA y G4-58).

The Harassment and Discrimination Prevention Committee is the internal body in charge of managing andinvestigating any grievances filed through the Whistleblowing Channel

86or through its own harassment

prevention channel87. Said committee has an action protocol88 and rules of procedure to set the actions thathave to be taken to resolve a grievance.

Four grievances were filed and addressed in 2016, three of which are still under investigation and the otherresolved through the issuance of the relevant report which included the appropriate preventive andcorrective measures. All of them are classified under the protocol known as “Harassment based on any othercharacteristic”.

The same procedure was followed for all the grievances received: (i) meeting of the Harassment PreventionCommittee; (ii) appointment of an investigator; (iii) performance of the investigation; (iv) issuance of report,which is brought before the Committee; (v) issuance of a final report by the Committee.

86Link: http://www.gamesacorp.com/es/capital-humano/canal-de-denuncia.html

87Link: [email protected]

88Action protocol in the event of workplace harassment or discrimination. Link: http://www.gamesacorp.com/recursos/doc/capital-

humano/nuestras-personas/protocolo-de-actuacion-en-caso-de-acoso-laboral.pdf


11b- HUMAN RIGHTS


Freedom of Association and Collective Bargaining


Gamesa and the companies that make up Grupo Gamesa promote and implement workers’ right to freedomof association, union membership and the effective right to collective bargaining. The importance of thisfundamental labor right is set out in the company’s Code of Conduct.

Further information on the committees and the agreements which apply to Gamesa personnel can be foundin the sections entitled “Employees covered by collective agreements” on page 33 and “Occupational healthand safety” on page 123.

G4-HR4 Operations and suppliers identified in which the right to exercise freedom of association and collectivebargaining may be violated or at significant risk, and measures taken to support these rights

Gamesa is aware of the role played by trade unions, not just in internal mediation to negotiate worker’s laborconditions, but also as strategic entities that exert an important influence on the economic, social, nationaland transnational spheres.

In China, the Trade Union Act recognizes the right of workers to form a trade union and request support fromthe employing company to do so. The National Trade Union is currently working so that employees may setup their own trade unions. Gamesa China is coordinating with the National Trade Union on all the initiativesaimed at making this proposal’s evolution possible. In this process, Gamesa covers the activities which wouldnormally be provided by the trade unions to the company’s employees, such as performing social activities,canteen services and transport services to the work center.

In India, trade union activities are set forth as a legal right for workers and opposing them is against the law.Gamesa firmly supports in said country any measure geared at creating a positive barrier-free workingenvironment between management and workers and is in favor of all negotiation processes. Workers’representatives of the nacelle and blade plants in India currently form part of the committees set up to dealwith issues like the canteen, social benefits and safety.

The United States has not ratified ILO conventions C087 and C098 on the right to organize and bargaincollectively. Despite this, Gamesa deems there is no risk of these rights being contravened with regard to thegroup’s workers due to the country’s sociopolitical characteristics.

Table 105.- Trade union representation in Spain

2016 2015 2014 2013 2012

Labor union Country N %D N %D N %D N %D N %D

UGT Spain 68 35.2% 71 35.1% 74 38.5% 74 37.9% 84 38.5%CCOO Spain 69 35.8% 76 37.6% 71 37.0% 74 37.9% 81 37.2%ELA Spain 35 18.1% 34 16.8% 24 12.5% 30 15.4% 33 15.1%LAB Spain 11 5.7% 11 5.4% 10 5.2% 8 4.1% 8 3.7%CIG Spain 1 0.5% 1 0.5% 3 1.6% 3 1.5% 5 2.3%Independents Spain 2 1.0% 2 1.0% 3 1.6% 2 1.0% 2 0.9%USO Spain - - - - - - - - 2 0.9%SOLIDARI Spain - - - - - - - - 2 0.9%CSIF Spain - - - - - - - - 1 0.5%LIBRE Spain 1 0.5% 1 0.5% 1 0.5% 1 0.5% - -ATYPE Spain 5 2.6% 5 2.5% 5 2.6% 3 1.5% - -FSC Spain 1 0.5% 1 0.5% 1 0.5% - - - -…..

Total 193 100% 202 100% 192 100% 195 100% 218 100%N: Number of trade union representatives; %D: percentage distribution


11b- HUMAN RIGHTS


Child labor


As established by the Gamesa Code of Conduct, all the companies which form part of Grupo Gamesa work toeliminate child labor or any kind of coerced labor. To do so, it has put in place the policies, commitments,procedures and measures needed to minimize this risk.

G4-HR5Operations and suppliers identified as having significant risk for incidents of child labor, and measurestaken to contribute to the effective abolition of child labor

With regard to the prevention of child labor, the Global Labor Agreement signed by Gamesa sets forthfulfillment of the Minimum Age Convention No. 138 of 1973 and the Worst Forms of Child Labor ConventionNo. 182 of 1999.

Forced or Compulsory Labor


As established by the Gamesa Code of Conduct, all the companies which form part of Grupo Gamesa work toeliminate forced or compulsory labor, labor done under harsh, extreme, inhuman or degrading conditions,and any kind of coerced labor. To do so, it has put in place the policies, commitments, procedures andmeasures needed to minimize this risk.

G4-HR6 Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor,and measures to contribute to the elimination of all forms of forced or compulsory labor

With regard to the prevention of forced labor, the Global Labor Agreement signed by Gamesa sets forthfulfillment of the Forced Labor Convention No. 29 of 1930 and the Abolition of Forced Labor Convention No.105 of 1957.

Security Practices


Corporate security at Gamesa is mainly aimed at planning and setting integrated protection policies andtechniques to ensure the comprehensive protection of the company’s tangible and intangible assets,including its people, goods, information and knowledge.

Gamesa’s activities are not performed in countries involved in armed conflicts and therefore risks resultingfrom possible human rights violations that take place in such circumstances are not envisaged, which itabsolutely condemns.

The Corporate Security Department currently has a stable workforce of 10 employees, who are based inSpain, Mexico, Brazil, China and India. The rest of the security personnel is hired via security firms. Gamesarequires these firms to be duly certified by the relevant government agencies and to have a health and safetypolicy in place. Gamesa’s general procurement conditions, particularly the clauses on the protection ofhuman rights and the prevention of fraud and corruption, apply to all contracts.


11b- HUMAN RIGHTS


Table 106.- Subcontracted security personnel

2016 2015 2014 2013 2012

EMEA 54 60 60 60 60USA 9 5 5 5 14APAC 25 16 7 7 41INDIA 100 74 55 55 55

BRAZIL89 - 2 2 2 2

LATAM - - - - -

Total: 188 157 129 129 172

The Corporate Security Department’s most relevant actions include the following:

Security alert management: A total of 482 (natural, health, technology and/or social risks) alerts wereanalyzed in 2016, of which 216 were managed directly. Most were resolved by taking preventive measures,informing employees about the alerts’ likelihood and drawing up recommendations to be followed, alongwith making control calls to ensure workers were unharmed.

Security incident management: The Corporate Security Department also handled 104 security incidentsspread across 22 countries throughout the world. It should also be pointed out that 51 healthcare supportactions were provided to travelers in 17 countries as a result of severe health risks, including:

Emergency healthcare and admission to hospital of traveling personnel

Medical repatriation

Security training: Over the course of 2016, 30 training actions on self-protection programs were carried outin at-risk areas (24 in EMEA, 3 in LATAM, 2 in APAC and 1 in all geographic areas).

Support to travelers: Lastly, there was continuous monitoring of the security of Gamesa employees travelinginternationally. It should be noted that 3,092 employees traveled abroad at least once and 35.41% of thedestinations were medium or high-risk countries. Under the call program, 30 security call programs covering11 countries and 32 travelers were made in 2016.

G4-HR7Percentage of security personnel trained in the organization’s human rights policies or procedures thatare relevant to operations

Responsibility for contracting and managing security services lies with Gamesa’s Corporate SecurityDepartment, which provides security staff with the instructions and the training needed to perform theirduties, particularly with respect to human rights. Proof of this is the fact that all subcontracted securitypersonnel have been informed about Gamesa’s Code of Conduct, as set forth in the relevant internaloperating procedure, and that such personnel undergo continuous auditing by the Corporate SecurityDepartment.

Indigenous Rights


As established in the Gamesa Code of Conduct, all the companies which belong to Grupo Gamesa arecommitted to respecting the rights of ethnic minorities and indigenous peoples in the places where theyoperate, and to promoting channels of communication and dialogue with the various groups affected by thegroup’s activities with a view to reaching a harmonious blend of corporate values and social expectations.

89The security personnel subcontracted in Brazil also work jointly for other companies.


11b- HUMAN RIGHTS


G4-HR8 Total number of incidents of violations involving rights of indigenous people and actions taken

There are no records of any actions performed by the group that involved a violation of the rights ofindigenous communities in 2016.

Assessment of Impact on Human Rights


G4-HR9Total number and percentage of operations that have been subject to human rights reviews or impactassessments

The information on the operations that have been subject to impact assessments on fundamental humanrights can be found under indicators G4-HR4, G4-HR5 and G4-HR6 in this section.

Furthermore, as indicated in the section entitled “Labor/Management Relations” (p. 120), the company, theIndustriALL Global Union, CCOO de Industria, MCA-UGT and FITAG-UGT signed a Global FrameworkAgreement on social, labor and environmental matters, the first global agreement to guarantee labor rightsby a company in the renewable energy sector.

The agreement applies to all companies (100%) belonging to Grupo Gamesa and all workers in the world. Itincludes new clauses which strengthen workers and unions’ rights.

One of the most innovative points is that Gamesa management will monitor and oversee the agreementjointly with IndustriALL Global Union and the Spanish unions that are signatories to agreement (FITAG-UGT,CCOO de Industria and MCA-UGT). A coordination and monitoring body has been set up to do this, which willhold periodic meetings and issue a balance on the agreement’s degree of fulfillment every two years to studypossible updates

Supplier Human Rights Assessment


Gamesa’s management approach to procurement practices is described under indicator G4-12 (p. 34)“Description of the supply chain” in this report. New suppliers are assessed in accordance with the abovemanagement approach and any significant risks relating to fundamental human rights are managedthrough the quality processes in place and regular audits.

G4-HR10 Percentage of new suppliers that were screened using human rights criteria


G4-HR11 Significant actual and potential negative human rights impacts in the supply chain and actions taken


The group’s general contracting terms and conditions for the purchase of equipment, materials, worksand services are public and available on www.gamesacorp.com. Both these general terms and conditionsand framework supply agreements include specific clauses on the supplier’s corporate socialresponsibility based on the UN Universal Declaration of Human Rights, ILO conventions and the principlesof the UN Global Compact.

During the time the contract is in force, the supplier authorizes Gamesa to review its degree of fulfillment


11b- HUMAN RIGHTS


of the principles set forth in it. Should the company detect any breach thereof and corrective action isnot taken, it reserves the right to terminate the contract. Gamesa is not aware of any non-compliance ofthis nature in its supply chain in 2016.

Human Rights Grievance Mechanisms


The grievance procedures and tools for human rights issues that Gamesa places at the disposal of itsstakeholders and their management processes are reflected in the group’s Code of Conduct, the CrimePrevention and Anti-Fraud Manual (see Section 3.7), as well as on the corporate website and the Gamesaintranet.Gamesa has a Whistleblowing Channel90 through which the company’s employees can get in touch with theEthics and Compliance Department to report activities that are unethical, lack integrity or go against theprinciples contained in the Code of Conduct.

The company and, as appropriate, the parent companies of the group’s (regional) business units havea Whistleblowing Channel that allows third parties and the group’s professionals to reportconfidentially any conduct that could involve a breach of the Code of Conduct and crime preventionmeasures.

On an exceptional basis, where the grievances have to do with workplace harassment, they are to besent to the Human Resources Department, which holds responsibility for investigating and concluding

such cases according to the Harassment Prevention Protocol.

G4-HR12 Number of grievances about human rights impacts filed, addressed, and resolved through formal grievancemechanisms

The company is equipped with mechanisms aimed at detecting potential incidents of discrimination,including:

Ethics and Compliance Department: There is no record of any human rights grievances being filedover the course of 2016 through the Whistleblowing Channel managed by this department.

Harassment Prevention Committee: No grievances about human rights were filed in 2016 through theWhistleblowing Channel connected with the Harassment and Discrimination Protocol managed by theHarassment Prevention Committee.

90http://www.gamesacorp.com/es/capital-humano/canal-de-denuncia.html


11c- SOCIETY


II.11c.- SOCIETY

G4-DMA Management approach: Society

Gamesa is willing to contribute to the improvement of the quality of life and wealth creation, both byproviding its own services like promoting and launching new business activities, as well as by drivingforward socio-economic development through non-business channels. The principles of its relationshipwith the community are as follows:

Awareness of social change in order to better understand how the needs of society in general areevolving to thus anticipate future demands in the environment.

Systematic, fluid and truthful information to create a climate of trust and credibility.

Respect for the environment by complying with prevailing legislation and collaborating in theenvironment’s conservation and improvement.

Job creation by leading new competitive business developments.

Providing support to the development of disadvantaged groups and sectors.

Supporting research to contribute to raising the scientific and technological level of ourenvironment, as well as promoting the use of technologies and methods of action which arerespectful to the environment.

Collaborating with institutions like umbrella groups for the community’s improvement anddevelopment.

Relationships with public authorities should be guided by institutional respect and fulfillment ofthe law.

The importance of issue set out in the company’s Code of Conduct.

Local Communities


Gamesa is present in over 50 countries around the world. As an institution, it faces its businessresponsibilities in the societies where it has a presence, whether as an employer, customer, supplier, ortaxpayer.

Likewise, the range of products and services Gamesa offers responds to the major challenges faced bysociety today; namely population growth, economic and social change, growing urbanization, and theneed to meet the demand for a clean inexhaustible source of energy and care for the environment.

These commitments are complemented by the provision of other services handled through non-businesschannels with a long-term view. Said services are focused on the creation of well-being within the localcommunities affected by the company’s operations.

Gamesa’s commitment in the countries where it operates is implemented through social initiatives inconjunction with public administrations, institutions and civil society organizations, as well as throughsponsorship and patronage.

The company gets involved in the local communities where it operates through action programs aimed atcreating well-being, local income and driving forward local technological development through initiativeslike, but not limited to, the following: i) local development cooperation programs; ii) educational accessand skills development programs; iii) programs aimed at conserving local culture; iv) providing healthservices; v) programs aimed at strengthening the community’s institutions, groups and local authorities;and vi) environmental, social and cultural programs involving local networks and other institutions.

These social initiatives to the benefit of local communities are carried out directly by Gamesa or by itssubsidiary or associate companies in their respective areas of action.

As regards the involvement of interested parties in the decision-making process, it should be pointed outthat energy planning in Gamesa’s sphere of action (energy sources, technologies and long-term needs) is


11c- SOCIETY


carried out by the public authorities, this being the institutional sphere in which the various stakeholderscan take part depending on the mechanisms established in each country.

Once the most appropriate infrastructure has been chosen, the views of the communities affected by itare taken into account through a consultation process, which varies depending on the country and typeof facility in question. Many of these processes, including environmental impact studies for facilities, aregoverned and conditioned by the granting of building and operation permits. During the planning andperformance of these actions, the company carries out preliminary consultations and maintains activechannels of dialog open with the communities and interested parties affected in order to identify andaddress their concerns or interests.

G4-SO1

G4-SO2

Percentage of operations with implemented local community engagement, impact assessments, anddevelopment programsOperations with significant actual and potential negative impacts on local communities

Impact assessment

Given that the impacts resulting from the commissioning of wind farms can be significant, applicablelegislation may require an environmental impact study, which must be approved by the competent publicauthorities, in the countries where the company develops this kind facilities.

Gamesa considers these studies as appropriate safeguards for the rights of communities, since theyaddress the most relevant concerns for the affected areas. It should be noted that land occupation istemporary in wind energy projects and does not involve a change of land use, because the turbines andrelated resources only occupy around 5% of the total land occupied. The agricultural areas and woodswhere they are located suffer only minimal productivity losses, which are offset in the leasingagreements.

As an indirect effect, most of the agricultural land used becomes land for industrial use, which couldinvolve a rise in land prices for the owner. Once the impacts generated have been identified, thenecessary preventive and corrective measures are set to mitigate them and, if necessary, appropriatebudget items are earmarked to meet the undertakings that have been made.

To conclude the process, monitoring programs are carried out to follow up on the various issuesidentified.

Development programs for local communities

In addition to generating and distributing economic value, Gamesa exerts an influence on thecommunities where it operates which goes beyond its own business operations and is extended into along-term commitment.

The company carries out initiatives in the fields of health, education, care for the environment and thedevelopment of community support infrastructures, especially in India. The actions carried out in favor ofthe community are various. For 2016, they can be summarized as follows:


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Main actions in 2016

A corporate social responsibility program under the name “Gamesa Community Spirit” was carried out inIndia. This program was implemented through a series of strategic programs, which included:

Gamesa Academic Excellence Program (GAEP): A program aimed at giving students in rural schoolsskills and educational grounding similar to that of their urban counterparts. The target consisted ofgiving 500 students support and included donating school kits to boys and girls from the localcommunity.

Under this program, the Shuddi project also sought to educate children on hygiene based on theconstruction of washbasins in rural schools.

Gamesa Gram Arogya Kendra (GGAP): This program sought to initiate sustainable healthcareprojects in rural villages near Gamesa wind farms. The areas of special attention included eye careand care for pregnant women in these villages, for which Gamesa provided the necessary medicalresources, periodic check-ups and prescriptions. It also gave these people a medical follow-up card.

Gamesa Vocational Training Program (GVTP): The GVTP program was divided into two actions:

o The wood recycling program, whereby waste wood is turned into classroom furniture for use inthe schools of the villages near the Gamesa manufacturing plants in Mamandur and Redhills(on the outskirts of Chennai).

o The My Career program was aimed at empowering rural students with professional capabilitiesand a sustainable job by training them in operations and maintenance (O&M) tasks.

Employee Volunteering (EV): The program was aimed at raising the awareness of Gamesa Indiaemployees and serving as a platform for employees to get themselves involved in social activities.Activities like Wind Day, International Week of the Deaf, blood donation campaigns and othercharitable activities were carried out under this program.

Main actions foreseen for 2017

The programs carried out by Gamesa India will carry on into 2017.

A new social initiative program 2016-2017 was also initiated in 2016 in conjunction with employees after106 projects conceived by them were received. As a result of it, Gamesa has started up new solidarityprojects that were designed by the company’s employees, which will be carried out over the course of2017. These projects include:

Training indigenous women in the region of Gujarat, India and empowering them economicallythrough agricultural microcredits. In conjunction with the Juan Bonal Foundation, 100 womenfrom the area (in a precarious situation and/or suffering a severe risk of social exclusion) will beprovided with the knowledge and tools needed to work arable land. The target is to train them sothey can get the most out of their land at different times of year (monsoon, summer and winter)and supply them with the materials (tools, manure, fertilizers, etc.) they need.

Kindergarten in Motiya (India). In conjunction with Bal Vikas India, this solidarity project aims tobuild a kindergarten to care for the village’s children while their parents work. This would allowthem to work at ease while their children get their first taste of education while being cared forand safe.

Gamesa Soccer League III (India). Youngsters from India’s rural areas will take part in this newedition of the program implemented in conjunction with Krida Vikas Sanstha Nagpur to hone theirsporting skills at a soccer training campus while, at the same time, being taught on how to care forthe environment and good eating habits.

Telecentros Project II (Brazil). The Telecentros Project in Brazil will be carried out in conjunctionwith Coordenaçao Regional das Obras de Promoçao Humana (CROPH). It is aimed at fosteringtechnology literacy through free centers where teenagers suffering a risk of exclusion can developtheir computer skills.

Fostering healthy lifestyles among girls, boys and young people from Unión Hidalgo in the Isthmusof Oaxaca Region (Mexico). In collaboration with CESAL, this project’s implementation will


11c- SOCIETY


strengthen the lines of action carried out at Escuela Socio Deportiva Aerogubiños in thecommunity of Unión Hidalgo, Oaxaca. It aims to promote health lifestyles among girls, boys andyoung people to foster community health, which has a positive impact on their quality of life.

Mulheres que criam - Camaçari (Brazil). Fostering the economic sustainability of the NossaSenhora do Amparo mothers group by sustaining the activities of a printing school, therebygenerating jobs and resources for economically vulnerable women.

Anti-corruption


Gamesa and the companies that make up Grupo Gamesa ensure that their activities are based on theprinciple of respect for the law and the fight against corruption in all its forms, and work to establish the bestguidelines to govern both the conduct of their people and the processes by defining working anddecision-making methods. In particular, they have adopted a set of measures designed to prevent, detectand react to any offenses that might be committed, and to combat fraud.

Some of these measures were conceived, reviewed and updated over the course of 2016, the mostoutstanding of which are set out below:

a) Article 3.8 in the group’s Code of Conduct, which was approved in April 2016, is literally worded “3.8Combating fraud. Rejection of corruption and the bribery: Gamesa and its group shall ensure theiractivities are based on the principle of respect for the law and the fight against corruption in all itsforms and state their firm commitment to the Crime Prevention and Anti-Fraud Policy’s principles,particularly by not performing any actions that may be deemed irregular in their relationships withcustomers, providers, suppliers, competitors, authorities, etc., including money laundering.

Should there be any doubt, the group’s professionals shall consult their direct superior or the Ethicsand Compliance Department.

As regards gifts, gifts, invitations, travel and any other kind of remuneration, Gamesa and its grouphave set forth specific guidelines which are aimed at limiting, and in some cases forbidding, gifts andinvitations made by the group’s professionals or received by them”.

b) The risk maps and crime controls for Spain, Italy, Mexico, China, India, the USA and Brazil wereupdated along the lines laid out by the Gamesa Corporación Tecnológica risk map in 2015.

c) The Crime Prevention and Anti-Fraud Manuals (which include corruption) were completed for thegroup’s main Spanish (GEOL, GESA, GET, GIT and GAMESA ELECTRIC) and Italian subsidiaries along thelines laid out by the Gamesa Corporación Tecnológica Crime Prevention and Anti-Fraud Manual, whichwas approved in 2015.

d) The rule on the prevention of conflicts of interest, which implements Article 3.9 of the Code of Conducton conflicts of interest, was updated.

e) Contractual clauses which specifically govern the prohibition of corruption in all its forms have beenincluded.

f) According to the Contract Approval Procedure, certain agreements (like Consultancy Agreements) haveto be approved or rejected by the Ethics and Compliance Department to ensure said contracts includemandatory anti-corruption clauses in keeping with the guidelines set by the company.

g) The corruption risk inherent to the group’s activities was analyzed and explained in the training actionscarried out during 2016 (see Section G4-57 herein).

The importance given to this is clearly reflected in the company’s Code of Conduct and Crime Prevention andAnti-Fraud Manuals, the latest updates of which were approved by the Board of Directors of GamesaCorporación Tecnológica, S.A. on September 23, 2015, and in the Suppliers Code of Conduct (particularly inArticle 15 on Corruption and Bribery).


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G4-SO3Total number and percentage of operations assessed for risks related to corruption and the significantrisks identified

Over the course of 2016, the crime risk maps were drawn up, which include corruption in geographic areas(centers/companies) where Gamesa operates (EMEA – Spain and Italy –, the United States, Mexico, Chinaand Brazil) as the basis for updating and improving prevention/mitigation controls for said risks, which areimplemented through the special part of the Crime Prevention and Anti-Fraud Manuals.

The following are among said internal rules, which are periodically updated and address: corporategovernance and business risk policies; direct and indirect procurement of investments and services;screening of materials and components suppliers; certification and monitoring of subcontractors;investments in tangible and intangible fixed assets; accounting policies and standards; contract approval;regulation of Gamesa’s legal and corporate structure, bodies of administration and powers of attorney;management of trips, advances, petty cash and credit cards; protection of Gamesa’s technological assets,know-how and intellectual property; information security; personal data protection; the use ofcommunication resources; occupational health and safety; environmental protection; and general terms andconditions of agreements. These internal rules cover and affect all areas and business units in any of thecompany’s geographic areas. It can thus be affirmed that all of them together constitute the activity ofanalyzing and controlling corruption risks.

G4-SO4 Communication and training on anti-corruption policies and procedures

The control systems described in the Section G4-SO3 are completed and complemented by the Ethics andCompliance Department’s area on the intranet (see Section G4-57) and particularly the section on theWhistleblowing Channel. Both the channel and the rules on its operation are updated and adapted regularlyaccording to any legislative amendments which come about (like the one made to the Data Protection Act)and internal regulations. The latest review of said rules and the channel’s Data Protection clause was made inApril 2016, both of which are available, along with the Whistleblowing Channel, not only on the intranet butalso on the corporate website.

Training on the Code of Conduct, the dissemination of a culture of compliance and respect for the law and inparticular the defense of human rights and the fight against corruption have been extended since 2009 tocover all organizational levels within Gamesa. Specific training focusing on key groups in different geographicareas has been given since them. More specifically, aside from the specific training set out in section G4-57,the Ethics and Compliance Department distributed in 2016 materials on the fight against corruption (theCode of Conduct, cards on the Whistleblowing Channel, etc.) to people attending training sessions held inEMEA (Spain and Italy), Brazil, the USA and Mexico, as well as to the rest of professionals located in saidgeographic areas and to others in India and China (approximately 6,000 employees).

Information on the policies, practices and mechanisms used to combat corruption also covers the entireworkforce and is likewise included in regular communication processes with employees over the intranet andin induction processes.

G4-SO5 Confirmed incidents of corruption and actions taken

No case of corruption was confirmed due to which it was necessary to adopt any kind of measure oncorruption was detected during 2016.

Public Policy


Gamesa takes part in the design of public policies on wind energy by belonging to industry associations inthe countries in where it has a presence. The interests of wind energy are defended through suchassociations and work is being done to consolidate it as a response to the energy and climate crisis, inaddition to being a key option to meet polluting gas reduction targets.

The company contributes to the formulation of wind industry policy positions on key issues. It helpscreate a regulatory framework in which Gamesa can successfully perform its activities and policies toreinforce the development of wind energy markets, infrastructures and technology through:


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The implementation of regulations favoring wind power by developing strategic initiatives toinfluence public policy so that stable markets are created and maintained and constraints againstwind energy are overcome;

The defense of efficient renewable energy incentive schemes, principally feed-in-tariffs, whichhave been demonstrated to be the most effective to provide security, continuity and trust toinvestors;

Setting ambitious targets for the presence of renewable energies in the energy mix;

The elimination of technical, bureaucratic and market constraints that limit the growth of windpower;

The promotion of R&D and innovation;

Making politicians, opinion makers, companies, the media, public opinion, NGOs and otherstakeholders aware of the benefits provided by wind energy.

G4-SO6 Total value of political contributions by country and recipient/beneficiary

The relationships of Gamesa and the companies which belong to Grupo Gamesa with public authoritiesshould be guided by institutional respect and fulfillment of the law. Any link to, membership of orcollaboration with political parties, institutions, foundations or associations whose purposes go beyondthose of Gamesa and the companies that make up Grupo Gamesa, as well as any contributions thereto,should be done in such a way so as to ensure their personal nature is clear and without involving thecompany or its political neutrality in any way whatsoever.

The importance given to this is reflected in the company’s Code of Conduct. It should be noted, however,that lobbying is a permitted, recognized and regulated practice in the United States. The financialcontributions Gamesa has historically allocated to this activity are disclosed and made available on theLobbying Disclosure Database91. However, no contributions were made in 2016.

Anti-Competitive Behavior


Gamesa and the companies that make up Grupo Gamesa are committed to competing in the marketsfairly, promoting free competition, fully fulfilling the legislation which applies and avoiding any kind ofconduct which may be considered as collusion, abuse or restriction of free competition.

Any agreements that might have negative effects on free competition have to be verified in advance bythe company’s legal services.

The importance given to this is reflected in the company’s Code of Conduct.

G4-SO7Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and theiroutcomes

Gamesa states that is has neither brought nor been subject to any legal action of this nature.

Compliance


Fulfillment of the letter and spirit of the law in force in countries where the group operates is one of thebasic rules contained in the company’s Code of Conduct. Another such rule is the avoidance of anyconduct which, while not violating the law of a country where it operates, goes against the values,principles or ethical behavior set forth in said Code.

91http://soprweb.senate.gov/index.cfm?event = selectfields


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G4-SO8Monetary value of significant fines and total number of non-monetary sanctions for non-compliancewith environmental laws and regulations

Gamesa states it has not been subject to any sanctions for failing to fulfill laws and regulations. As far asit is aware, Gamesa fulfills all legal provisions and regulations.

Supplier Assessment for Impacts on Society


Gamesa is equipped with screening procedures for new suppliers of both goods and services, throughwhich their social performance is assessed with a view to their acceptance as suppliers of the company. Itlikewise has management procedures and an assessment methodology for external materials suppliersdepending on the degree to which they have implemented a management system that ensures productquality in environmentally-friendly facilities that takes the health and safety of their employees intoaccount.

G4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society

Gamesa’s management approach to procurement practices is described under indicator G4-12 (p. 34)“Description of the supply chain” in this report. New suppliers are assessed in accordance with the abovemanagement approach, and any significant risks relating to any possible social repercussions aremanaged through the quality processes in place and regular audits.

G4-SO10 Significant actual and potential negative impacts on society in the supply chain and actions taken

All the disclosures made under indicator G4-LA9 apply.


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Grievance Mechanisms for Impacts on Society


The grievance procedures and tools in the area of impacts on society which Gamesa places at thedisposal of its stakeholders and their related management processes are reflected in the group’s Code ofConduct and on the Gamesa website. Said website has a Whistleblowing Channel92 through whichemployees and the general public can report any conduct that goes against ethics or integrity or breachesthe principles contained in the Code of Conduct to the Ethics and Compliance Department.

G4-SO11Number of grievances about impacts on society filed, addressed, and resolved through formalgrievance mechanisms

No grievances about impacts on society were detected by the Ethics and Compliance Department during2016.

92http://www.gamesacorp.com/es/capital-humano/canal-de-denuncia.html


11d- PRODUCT RESPONSIBILITY


II.11d.- PRODUCT RESPONSIBILITY


Gamesa’s aim is to meet the needs and expectations of customers in an optimal, reliable and competitivefashion.

It promotes the establishment of long-lasting business relationships with its customers. Suchrelationships are based on a consistent attitude of service, trust and value creation by developingsolutions which exceed their expectations and do not involve risks to their health or safety, respectingcommitments, duly announcing in advance any changes made to agreements and maintaining acommitment to honesty, professional responsibility and transparency with customers which goes beyondany legal requirements.

Gamesa and the companies which comprise Grupo Gamesa shall likewise ensure the confidentiality oftheir customers’ data and make a commitment not to disclose such data to third parties, unlessauthorized to do by the customer, as a result of a legal obligation, or to fulfill court rulings andadministrative resolutions.

Customer Health & Safety


The company assesses the impacts of its products on the health and safety of its customers from theinitial development stages with the aim of improving them.

Management procedures are in place to set the activities, responsibilities and work flows to ensure this.For instance, one such procedure is the Gamesa Customer Solutions Conception System (SC2G) whichaims to detect intrinsic design features that could unnecessarily generate future hazards or dangersarising from a poor conception of safety conditions, which could affect the health and safety of workerswho will work on the element designed throughout its useful life.

G4-PR1Percentage of significant product and service categories for which health and safety impacts areassessed for improvement

Gamesa offers its customers a global product manufacturing capacity through an industrial basecharacterized by optimal vertical integration, which provides numerous competitive advantages, such as:

Extensive technological knowledge about key component design principles, enabling it to quicklyimplement pioneering technologies in new models and designs (segmented blades, generators,and latest-generation gear reducers);

Industrial experience in efficient supply based on extensive knowledge of cost structures andcritical components;

Outstanding service based on operational experience in key components, making it possible tooptimize maintenance and repairs.

Furthermore, the Operations and Maintenance Service (O&M) has 22 years of experience, expertise anda global presence. Said service has an extensive team (in-house and subcontracted personnel), a logisticsnetwork and central, regional and wind farm warehouses, along with a spare parts inventory that ensuresmaximum parts availability in the shortest possible time.

The technical offices have all kinds of specialists who study and analyze our products’ performance andimplement any modifications and adaptations needed to maximize the customer’s results, as well asout-of-warranty service contracts adapted to customer needs at competitive prices.

In any event, the countries where Gamesa operates have enacted a great deal of environmental andlabor legislation to ensure that any risks to people’s health and safety are kept within regulated limits.




The group provides the training and information needed to check that the operating conditions set forthin the regulations and technical specifications concerning the equipment construction, operation andmaintenance are met.

G4-PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning thehealth and safety impacts of products and services during their life cycle, by type of outcomes

Gamesa has no record of any incidents of non-compliance of this kind taking place in 2016.

Product and Service Labeling


Gamesa places special importance on providing an appropriate degree of information and labeling on thesustainability of its products and services. Given the nature of the equipment sold, warranties are setforth in agreements between the customer and the supplier.

G4-PR3Type of product and service information required by the organization’s procedures for product andservice information and labeling, and percentage of significant product and service categories subjectto such information requirements

In order to ensure truthful information is provided about its products, technologies and services, Gamesamaintains sales and marketing practices that respect the legitimate interests and rights of recipients andprovide suitable information to facilitate their choice.

Likewise, any sales messages drawn up by Gamesa are conceived under the umbrella of a transparentand truthful marketing policy and no subjective comparisons are made in them. No information issupplied that could lead to a conflict of third-party rights or to a breach of good faith in business orcontractual relationships with third parties. These policies cover all geographic areas where Gamesa has acommercial presence and ensure compliance with legal regulations.

G4-PR4Total number of incidents of non-compliance with regulations and voluntary codes concerning productand service information and labeling, by type of outcomes

Gamesa has did not receive any penalties in 2016 due to the marketing tools used to communicate aboutits products.




G4-PR5 Results of surveys measuring customer satisfaction

Gamesa aspires to meet its customers’ expectations, improve the channels of communication with themand ensure maximum quality in its offering through its sales activities. Priority actions in this are clearand include: gearing the offering to customer needs and to the development of new technologies, so asto allow for an improvement in the productivity, sustainability and excellence parameters of productsand services to the benefit of its customers.

In order to maintain proximity and ongoing dialog, Gamesa establishes continuous feedback mechanismsand processes. The company has made a significant effort in recent years to remain close to customersand strengthen personal attention by opening new commercial offices to make more informationavailable on products and their features, as well as to channel queries, complaints and claims.

Additionally, the company’s participation in international trade fairs and holding specific events withcustomers open up new channels of communication which make a contribution to strengtheningbusiness relationships.

Gamesa conducts a customer satisfaction project (CSP) every two years, a tailored survey on maincustomers which allows it to establish direct communications and measure the quality of its products andservices. To do so, topics related to the development, construction and operating stages of projects areassessed, along with overall perceptions on the company.

A total of 117 (71 in 2014) customers in 26 different countries (17 in 2014) took part in the last CSPconducted in 2016, which accounted for 90% (81% in 2014) of customers based on the percentage ofMW sold/contracted in the period under study. The results reveal that the company’s customers aresatisfied with Gamesa’s general behavior at all stages of a wind energy project.

Fig 36.- CSP 2016 Results

Fig 37.- CSP 2016 Conclusions

Work will be carried out on a specific action plan focused on the areas needing improvement andongoing communications on priority areas of work will be maintained with customers over the course of2017 as part of the continuous cycle of customer-driven actions.

1.901.69 1.83 1.95 1.80

0

1

2

3

Development Construction Operation Company OverallSatisfaction

CSP 2012 CSP 2014 CSP 2016




Marketing Communications


Gamesa operates in the field of advanced technology and does not supply products or services to thegeneral consumer market. This is therefore not a material aspect.

Gamesa boosts its presence in new markets by taking part in the industry’s trade fairs, exhibitions andconferences. Some of the major trade fairs and events in which Gamesa took part in 2016 included:

International trade fairs in 2016

Mexico Windpower 2016 (Mexico City, February 24-25)

Norwea Annual Meeting 2016 (Oslo, March 3)

PWEA Conference & Exhibition (Warsaw, March 8-9)

Vaasa Wind Exchange & Solar (Vaasa, Finland, March 15-16)

International Energy & Environment Fair & Conference (ICCI) (Istanbul, April 27-29)

AWEA Windpower Conference and Exhibition 2016 (New Orleans, May 23-26)

Brazil Windpower Conference & Exhibition 2016 (Rio de Janeiro, August 30-September 1)

Renewable Energy India Expo (New Delhi, September 7-9)

WindEurope Summit and WindEnergy Hamburg 2016 (Hamburg, September 27-30)

China Wind Power Exhibition 2016 (Beijing, October 19-21)

Conferences and seminars

Wind Energy Update (Hamburg, February 3-4)

Wind Expo Japan (Tokyo, May 2-4)

Windpower Monthly Wind Data Conference 2016 (Houston, March 15) Wind Industry Forum (Melbourne, March 17)

SKF Wind Farm Management Conference (Brussels, April 19-20)

ASEAN Sustainable Energy Week (Bangkok, June 1-4)

ADB Clean Energy Forum (Manila, June 6-10) WPM Blade O&M Forum (Chicago, September 1-2)

G4-PR6 Sale of banned or disputed products

The products and services sold by Gamesa are not banned in any of the markets in which it operates.

G4-PR7Total number of incidents of non-compliance with regulations and voluntary codes concerningmarketing communications, including advertising, promotion, and sponsorship, by type of outcomes

Gamesa has no record of incidents connected with the marketing and advertising of its products in 2016.




Customer Privacy


The privacy of customers’ personal information in the countries where the group has a presence isprotected by Code of Ethics’ mandatory application, which sets froth that Gamesa and the companiesthat comprise Grupo Gamesa shall ensure the confidentiality of customers’ data, undertaking not todisclose them to third parties without the customer’s consent, except where a legal obligation shouldoblige it to do so or pursuant to a court or administrative ruling.

G4-PR8Total number of substantiated complaints regarding breaches of customer privacy and losses ofcustomer data

Gamesa has no record of any incidents concerning respect for customers, their privacy and the leaking oftheir personal data in 2016.

Compliance


Fulfillment of the letter and spirit of the law in force in countries where the group operates is one of thebasic rules contained in the company’s Code of Conduct. Another such rule is the avoidance of anyconduct which, while not violating the law of a country where it operates, goes against the values,principles or ethical behavior set forth in said Code.

G4-PR9Monetary value of significant fines for non-compliance with laws and regulations concerning theprovision and use of products and services

There is no record of any significant fines or sanctions relating to non-compliance with product andservices health and safety requirements, or to non-compliance regarding product-related information.Nor are there records of any penalties relating to marketing communications, including advertising andpromotion.

There is no record of penalties relating to non-compliance with contractual conditions, nor therefore ofadministrative or judicial rulings that have resulted in a penalty for such cause.

CORPORATE RESPONSIBILITY REPORT 2016 | APPENDICES


APPENDICES

CORPORATE RESPONSIBILITY REPORT 2016 | APPENDICESAPPENDIX I: GRI G4 CONTENT INDEX


APPENDIX I: GRI G4 CONTENT INDEX

GENERAL STANDARD DISCLOSURES

General StandardDisclosures

Page Omissions ExternalAssurance

Description

Strategy and Analysis

G4-1 5 - 164 Statement from the primarily responsible for decisions of the organizationabout the relevance of sustainability for the organization and its strategy with aview to addressing said topic.

G4-2 7 - 164 Key impacts, risks and opportunities

Organizational profile

G4-3 21 - 164 Name of the organizationG4-4 21 - 164 Primary brands, products and servicesG4-5 24 - 164 HeadquartersG4-6 25 - 164 Countries where there are significant operationsG4-7 26 - 164 Nature of ownership and legal form.G4-8 27 - 164 Markets servedG4-9 27 - 164 Scale of the organizationG4-10 32 - 164 WorkforceG4-11 33 - 164 Employees covered by collective bargaining agreementsG4-12 34 - 164 Description of the supply chainG4-13 41 - 164 Significant changes during the yearG4-14 42 - 164 Precautionary principleG4-15 42 - 164 Principles of initiatives subscribed or endorsedG4-16 44 - 164 Membership in associations

Material aspects and boundariesG4-17 45 - 164 Entities included in the consolidated financial statements and in the scope of

the reportG4-18 46 - 164 Determination of GRI content and application of its principles

G4-19 47 - 164 Material aspects identified

G4-20 48 - 164 Boundary within the organization

G4-21 48 - 164 Boundary outside the organization

G4-22 50 - 164 Restatements of information provided in previous reports

G4-23 50 - 164 Significant changes in the report’s scope and boundary

Stakeholder engagementG4-24 51 - 164 Stakeholders engaged by the organization

G4-25 51 - 164 Basis for the selection of stakeholders

G4-26 51 - 164 Approach adopted to relations with stakeholder groups

G4-27 56 - 164 Key topics and concerns raised through stakeholder engagement

Report profile

G4-28 57 - 164 Period covered by the report

G4-29 57 - 164 Date of last report

G4-30 57 - 164 Reporting cycle of the report

G4-31 57 - 164 Contact point for questions regarding the report

G4-32 57 - 164 GRI Index regarding the “in accordance” option

G4-33 57 - 164 External assurance of the report



GENERAL STANDARD DISCLOSURES

General StandardDisclosures

Page Omissions ExternalAssurance

Description

Governance

G4-34 58 - 164 Governance structure

G4-35 61 - 164 Delegation of authority by the highest governance body to senior management

G4-36 62 - 164 Executive-level positions with responsibility for economic, environmental andsocial topics

G4-37 62 - 164 Processes for consultation between stakeholders and the Board of Directors

G4-38 63 - 164 Composition of the highest governance body

G4-39 63 - 164 Report whether the chair of the highest governance body is also an executiveofficer and the reasons for this arrangement

G4-40 65 - 164 Nomination and selection processes for the highest governance body

G4-41 66 - 164 Processes for the highest governance body to ensure conflicts of interest areavoided

G4-42 68 - 164 Highest governance body’s and senior executives’ roles in the development,approval, and updating of the organization’s purpose, value or missionstatements, strategies, policies and goals

G4-43 68 - 164 Highest governance body’s collective knowledge of economic, environmentaland social topics

G4-44 70 - 164 Highest governance body’s performance

G4-45 70 - 164 Highest governance body’s role in the identification and management ofeconomic, environmental and social impacts, risks and opportunities, includingits role in the implementation of due diligence processes and stakeholderconsultation

G4-46 72 - 164 Highest governance body’s role in reviewing the effectiveness of theorganization’s risk management processes for economic, environmental andsocial topics

G4-47 72 - 164 Frequency of the highest governance body’s review of economic,environmental and social impacts, risks, and opportunities

G4-48 72 - 164 Highest committee or position that formally reviews and approves thesustainability report

G4-49 72 - 164 Process for communicating critical concerns to the highest governance body

G4-50 72 - 164 Critical concerns that were communicated to the highest governance body

G4-51 73 - 164 Remuneration policies for the highest governance body and senior executives,as well as how they relate to economic, environmental and social performance

G4-52 74 - 164 Process for determining the remuneration of the highest governance body andsenior executives, reporting whether any independent consultants are involved

G4-53 74 - 164 Report how stakeholders’ views and expectations are sought and taken intoaccount regarding remuneration policies

G4-54 74 - 164 Relation among different levels of remuneration in the organization

G4-55 74 - 164 Increase in remuneration in the organization

Ethics and integrity

G4-56 75 - 164 Description of the organization’s values, principles, standards and norms ofbehavior such as codes of conduct and codes of ethics

G4-57 78 - 164 Internal and external mechanisms for seeking advice on ethical and lawfulbehavior

G4-58 79 - 164 Internal and external mechanisms for reporting concerns about unethical orunlawful behavior, and matters related to organizational integrity



SPECIFIC STANDARD DISCLOSURESMaterial aspects Information on the

managementapproach and

indicators

Omissions ExternalAssurance

Description

Category: ECONOMYMaterial aspects Page Omissions External

AssurancePage of

referenceDescription

Economic performance G4-DMA 84 - 164 Management approach

G4-EC1 89 - 164 Direct economic value generated and distributed

G4-EC2 89 - 164 Financial implications and other risks deriving from climate change

G4-EC3 90 - 164 Coverage of the organization’s defined benefit plan obligations

G4-EC4 90 - 164 Financial assistance received from government agencies

Market Presence G4-DMA 90 - 164 Management approach

G4-EC5 91 - 164 Ratio of standard entry level wage to local minimum wage

G4-EC6 91 - 164 Percentage of locally-hired executives at significant locations ofoperation

Indirect economic impacts G4-DMA 92 - 164 Management approach

G4-EC7 92 - 164 Development and impact of infrastructure investments andservices provided

G4-EC8 92 - 164 Significant indirect economic impacts, including the extent ofimpacts

Procurement practices G4-DMA 92 - 164 Management approach

G4-EC9 92 - 164 Proportion of spending on local suppliers

Category: ENVIRONMENTMaterial aspects Page Omissions External

AssurancePage of


Materials G4-DMA 95 - 164 Management approach

G4-EN1 95 - 164 Materials used by weight and volume

G4-EN2 96 - 164 Percentage of materials used that are recycled input materials.

Energy G4-DMA 96 - 164 Management approach

G4-EN3 96 - 164 Energy consumption within the organization

G4-EN4 98 - 164 Energy consumption outside the organization

G4-EN5 98 - 164 Energy intensity

G4-EN6 98 - 164 Reduction of energy consumption

G4-EN7 98 - 164 Reductions in energy requirements of products and services

Water G4-DMA 99 - 164 Management approach

G4-EN8 99 - 164 Total water withdrawal by source

G4-EN9 99 - 164 Water sources significantly affected by withdrawal of water

G4-EN10 100 - 164 Percentage and total volume of water recycled and reused

Biodiversity G4-DMA 100 - 164 Management approach

G4-EN11 101 - 164 Operational sites in protected areas and areas of high biodiversityvalue outside protected areas

G4-EN12 103 - 164 Impacts of activities, products, and services on biodiversityG4-EN13 104 - 164 Habitats protected or restoredG4-EN14 104 - 164 IUCN red list and national conservation list species with habitats in

areas affected by operations

Emissions G4-DMA 105 - 164 Management approachG4-EN15 108 - 164 Direct greenhouse gas (GHG) emissions (Scope 1)G4-EN16 108 - 164 Energy indirect greenhouse gas (GHG) emissions (Scope 2)G4-EN17 109 - 164 Other indirect greenhouse gas (GHG) emissions (Scope 3)G4-EN18 109 - 164 Greenhouse gas (GHG) emissions intensityG4-EN19 109 - 164 Reduction of greenhouse gas (GHG) emissionsG4-EN20 109 - 164 Emissions of ozone-depleting substances (ODS)

G4-EN21 110 - 164 NOx, SOx and other significant air emissions

Effluents and waste G4-DMA 110 - 164 Management approach

G4-EN22 110 - 164 Total water discharge by quality and destination

G4-EN23 111 - 164 Total weight of waste by type and disposal method

G4-EN24 112 - 164 Total number and volume of significant spills

G4-EN25 112 - 164 Transported waste deemed hazardous

G4-EN26 112 - 164 Water bodies and related habitats significantly affected by theorganization’s discharges of water and runoff





indicators


Description

Material aspects Page Omissions ExternalAssurance

Page ofreference

Description

Products and services G4-DMA 113 - 164 Management approach

G4-EN27 113 - 164 Extent of impact mitigation of environmental impacts of productsservices

G4-EN28 113 - 164 Percentage of products sold and their packaging materials that arereclaimed by category

Compliance G4-DMA 115 - 164 Management approach

G4-EN29 115 - 164 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental lawsand regulations.

Transport G4-DMA 115 - 164 Management approach

G4-EN30 115 - 164 Significant environmental impacts of transporting products andother goods and materials used for the organization’s operations,and transporting members of the workforce.

General G4-DMA 115 - 164 Management approach

G4-EN31 116 - 164 Total environmental protection expenditures and investments bytype

Supplier environmentalassessment

G4-DMA 116 - 164 Management approach

G4-EN32 116 - 164 Percentage of new suppliers that were screened usingenvironmental criteria

G4-EN33 116 - 164 Significant actual and potential negative environmental impacts inthe supply chain and actions taken

Environmental grievancemechanisms


G4-EN34 116 - 164 Number of grievances about environmental impacts filed,addressed, and resolved through formal grievance mechanisms

Category: SOCIAL PERFORMANCE

SUBCATEGORY: LABOR PRACTICES AND DECENT WORKMaterial aspects Page Omissions External

AssurancePage of


Employment G4-DMA 117 - 164 Management approach

G4-LA1 118 - 164 Total number and rates of new employee hires and employeeturnover by age group, gender and region

G4-LA2 119 - 164 Benefits provided to full-time employees that are not provided totemporary or part-time employees

G4-LA3 119 - 164 Return to work and retention rates after parental leave, by gender

Labor/ManagementRelations


G4-LA4 121 - 164 Minimum notice periods regarding operational changes, includingwhether these are specified in collective agreements

Occupational health & safety G4-DMA 121 - 164 Management approach

G4-LA5 123 - 164 Percentage of total workforce represented in joint management-worker health and safety committees that help monitor and adviseon occupational health and safety programs.

G4-LA6 124 - 164 Types and rates of injury, occupational diseases, lost days, andabsenteeism, and work-related fatalities.

G4-LA7 126 - 164 Workers with high incidence or high risk of diseases related to theiroccupation

G4-LA8 127 - 164 Health and safety topics covered in formal agreements with laborunions

Training and Education G4-DMA 128 - 164 Management approach

G4-LA9 128 - 164 Average hours of training per year per employee by gender, and byemployee category

G4-LA10 129 - 164 Programs for skills management and lifelong learning that supportthe continued employability of employees and assist them inmanaging career endings

G4-LA11 130 - 164 Percentage of employees receiving regular performance and careerdevelopment reviews





indicators


Description

Material aspects Page Omissions ExternalAssurance

Page ofreference

Description

Diversity and equalopportunities


G4-LA12 133 - 164 Composition of governance bodies and breakdown of employeesper employee category according to gender, age group, minoritygroup membership, and other indicators of diversity

Equal Remuneration forWomen and Men


G4-LA13 135 - 164 Ratio of basic salary and remuneration of women to men byemployee category, by significant locations of operation

Supplier Assessment forLabor Practices


G4-LA14 136 - 164 Percentage of new suppliers that were screened using laborpractices criteria

G4-LA15 136 - 164 Significant actual and potential negative impacts for labor practicesin the supply chain

Labor Practices GrievanceMechanisms


G4-LA16 136 - 164 Number of grievances about labor practices filed, addressed, andresolved through formal grievance mechanisms

SUBCATEGORY: HUMAN RIGHTSMaterial aspects Page Omissions External

AssurancePage of


Investment G4-DMA 137 - 164 Management approach

G4-HR1 137 - 164 Investment agreements and contracts that include human rightsclauses

G4-HR2 138 - 164 Employee training on human rights

Non-Discrimination G4-DMA 138 - 164 Management approach

G4-HR3 138 - 164 Total number of incidents of discrimination and corrective actionstaken

Freedom of Association andCollective Bargaining


G4-HR4 139 - 164 Operations and suppliers identified in which the right to exercisefreedom of association and collective bargaining may be violatedor at significant risk

Child labor G4-DMA 140 - 164 Management approach

G4-HR5 140 - 164 Operations and suppliers identified as having significant risk forincidents of child labor

Forced or Compulsory Labor G4-DMA 140 - 164 Management approach

G4-HR6 140 - 164 Operations and suppliers identified as having significant risk forincidents of forced labor

Security Practices G4-DMA 140 - 164 Management approach

G4-HR7 141 - 164 Percentage of security personnel trained in the organization’shuman rights policies

Indigenous Rights G4-DMA 141 - 164 Management approach

G4-HR8 142 - 164 Total number of incidents of violations involving rights ofindigenous people and actions taken

Assessment G4-DMA 142 - 164 Management approach

G4-HR9 142 - 164 Total number and percentage of operations that have been subjectto human rights reviews or impact assessments

Supplier Human RightsAssessment


G4-HR10 142 - 164 Operations that have been subject to human rights impactassessments

G4-HR11 142 - 164 Human rights impacts in the supply chain

Human Rights GrievanceMechanisms


G4-HR12 143 - 164 Operations that have been subject to human rights impactassessments





indicators


Description

SUBCATEGORY: SOCIETYMaterial aspects Page Omissions External

AssurancePage of


Local Communities G4-DMA 144 - 164 Management approach

G4-SO1 145 - 164 Local community engagement, impact assessments, anddevelopment programs

G4-SO2 145 - 164 Significant actual or potential negative impacts on localcommunities

Anti-corruption G4-DMA 147 - 164 Management approach

G4-SO3 148 - 164 Operations assessed for risks related to corruption

G4-SO4 148 - 164 Communication and training on anti-corruption policies andprocedures

G4-SO5 148 - 164 Confirmed incidents of corruption and actions taken

Public Policy G4-DMA 148 - 164 Management approach

G4-SO6 149 - 164 Total value of political contributions by country andrecipient/beneficiary

Anti-Competitive Behavior G4-DMA 149 - 164 Management approach

G4-SO7 149 - 164 Legal actions for anti-competitive behavior, anti-trust, andmonopoly practices


G4-SO8 150 - 164 Significant fines and non-monetary sanctions

Supplier Assessment forImpacts on Society


G4-SO9 150 - 164 Suppliers screened using criteria for impacts on society

G4-SO10 150 - 164 Impacts on society in the supply chain

Grievance Mechanisms forImpacts on Society


G4-SO11 151 - 164 Grievances about impacts on society

SUBCATEGORY: Product ResponsibilityMaterial aspects Page Omissions External

AssurancePage of


Customer Health & Safety G4-DMA 152 - 164 Management approach

G4-PR1 152 - 164 Products and services categories for which health and safetyimpacts are assessed

G4-PR2 153 - 164 Incidents of non-compliance with regulations or codes concerninghealth and safety impacts

Product and Service Labeling G4-DMA 153 - 164 Management approach

G4-PR3 153 - 164 Product and service information required by the organization’sprocedures and by law

G4-PR4 153 - 164 Incidents of non-compliance with regulations and voluntary codesconcerning product and service information and labeling

G4-PR5 154 - 164 Results of surveys measuring customer satisfaction

Marketing Communications G4-DMA 155 - 164 Management approach

G4-PR6 155 - 164 Sale of banned or disputed products

G4-PR7 155 - 164 Incidents of non-compliance with regulations and voluntary codesconcerning marketing communications

Customer Privacy G4-DMA 156 - 164 Management approach

G4-PR8 156 - 164 Substantiated complaints regarding breaches of customer privacyand losses of customer data


G4-PR9 156 - 164 Significant fines for non-compliance with laws and regulationsconcerning the provision and use of products and services

CORPORATE RESPONSIBILITY REPORT 2016 | APPENDICESAPPENDIX II: EXTERNAL ASSURANCE


APPENDIX II: EXTERNAL ASSURANCE REPORT

CORPORATE RESPONSIBILITY REPORT 2016 | APPENDICESAPPENDIX III: LIST OF CENTERS


APPENDIX III: LIST OF CENTERS

Main locations and offices

SPAINParque Tecnológico de Bizkaia,Edificio 22248170 Zamudio, SpainTel. No.: +34 944 037 352

SPAINCiudad de la Innovación, 9-1131621 Sarriguren, SpainTel. No: +34 948 771 [email protected]

SPAINC/ Ramírez de Arellano, 3728043 Madrid, SpainTel. No: +34 91 503 17 00

AUSTRALIALevel 39, 385 Bourke Street,Melbourne VIC 3000

GREECE9 Adrianiou St.,11525 Neo Psychiko, AthensTel. No: +30 21067 48947

PHILIPPINES22

ndFloor,

The Enterprise Center Tower I1226 Ayala AvenueMakati City, PhilippinesTel. No: +63 917 820 4414

TURKEYAstoria Buyukdere Cad. No. 127Kule A, Kat 10. Esentepe.Istanbul 34394Tel. No: +90 212 340 76 00

BRAZILRua Hungria 1240, 3ºAJd. Europe, CEP 01455-000São Paulo (SP)Tel. No: +5511 3096 4444

HONG KONGAsia Pacific OcenaiaCentral Plaza, 35

thFloor

18 Harbour RoadHong Kong SARTel. No: +852 2593 1140

POLANDUl. Galaktyczna 30A80-299 GdanskTel. No: +48 58 766 62 [email protected]

UNITED KINGDOM25 Napier PlaceWardpark NorthCumbernauld G68 OLLTel. No: +44 1236724890

CHINA23/F, Tower 1, Beijing ProsperCenter No. 5, Guanghua Road,Chaoyang District, Beijing 100020Tel. No: +86 10 5789 0899

INDIAThe Futura IT Park, B-Block, 8

th

Floor; 334, Rajiv Gandhi SalaiSholinganallur, Chennai - 600 119Tel. No: +91 44 3924 [email protected]

ROMANIACalea Floreasca, Building A, 4

th

floor, Office No. 1, Sector 2069014459 BucharestTel. No: +40 318 21 24

UNITED STATES1150 Northbrook DriveTrevose, PA 19053Tel. No: +1 215 710 3100

EGYPT3, Rd 218 Degla, Maadi, CairoTel. No: +20 225 211 048

ITALYVia Pio Emanuelli, 100143 RomeTel. No: +39 0645543650

SRI LANKA#51/1, Colombo Road,Kurana, KatunayakeTel. No: +94 31 2235890

FRANCE97 Allée Borodine - Cedre 369800 Saint PriestTel. No: +33 (0) 4 72 79 49 39

JAPANTOC Minatomirai Bldg. 10F,1-1-7 Sakuragi-cho, Naka-ku,Yokohama-shiKanagawa 231-0062Tel. No: +81 80 3465 6861

SWEDEN, FINLAND & NORWAYBibliotekstorget 8171 45 Solna, SwedenTel. No: +46 (0) 8 510 668 10

GERMANYNeuer Wall 10 / Jungfernstieg20354 HamburgTel. No: +49 40 822 15 30 - 48

MEXICOC/ Hamburg, n.º 213, Plant 18,Juárez (Reforma Centro)06600, Mexico DFTel. No: +52 55 5093 4637

THAILANDSathom Square98 North Sathom Road37/F Sathom SquareSilom, Bangkok 10500

Production centers

BrazilRua dos Polímeros, s/n – PoloPetroquímico– CEP 42810-220 Camaçari-BANacelle plant

Spain (A Coruña)Polígono Industrial s/n,As Somozas s/n, 15565, ACoruña (Galicia)Blade plant

Spain (A Coruña)Polígono Ind. de Sigüeiro,parcela 52 15688 Sigüeiro(Oroso) A CoruñaGearbox plant

Spain (Burgos)Polígono IndustrialVillalonquejar, Condado deTreviño 39, 09001, Burgos(Castilla y León)Gearbox plant

Spain (Burgos)Polígono Vega de SantaCecilia, C/ A, 09340, Lerma(Burgos)Gearbox plant

Spain (Burgos)Polígono Industrial de Bayasc/Suzana, Parcela 13709200 Miranda de Ebro(Burgos)Blade plant

Spain (Cantabria)Pº Alejandro Calonge, 3,39200, Reinosa (Cantabria)Generator plant

Spain (Cuenca)Polígono Los Palancares, km.2 - Ctra. Valencia, 16004,Cuenca (Castilla-La Mancha)Blade root plant

Spain (Gipuzkoa)Ctra. Asteasu cruce Alkiza,20159, Asteasu (Guipúzcoa)Gearbox plant

Spain (Madrid)Gamesa Avda. Fuentemar 5,28820, Coslada (Madrid)Converter plant

Spain (Navarra)Urbanización Área deReparto. Polígono IndustrialAoiz. AR-3, 31430,Aoiz (Navarra)Blade plant

Spain (Soria)Polígono Industrial ValdemiésII, Parcela 3, 42100, Ágreda(Soria)Nacelle plant

Spain (Valencia)Parque Empr. Turianova,manzana 3 naves 1-7 Ctra.Benissano-Olocau, 46181,Benissano (Valencia)Converter plant

Spain (Vizcaya)Polígono Industrial Trobika,Martintxone Bidea 31, 48100,Munguía (Vizcaya)Gearbox plant

India (Halol)Gidc Halol, Phase 3Panchmahal District389350 GujaratBlade plant

India (Mamandur)Madhuranthagam TalukKancheepuram District603111 Tamil NaduNacelle plant

India (Nellore)North Amuluru, AndhraPradesh 524316, IndiaBlade plant

People’s Republic of China(Tianjin)No. 8 Fourth Road,Hiatai Creative Road Huayuan300384 TianjinGearbox plant

People’s Republic of China(Tianjin)No. 8 Fourth Road,Hiatai Creative Road Huayuan300384 TianjinGenerator plant

People’s Republic of China(Tianjin)No. 8 Fourth Road,Hiatai Creative Road Huayuan300384 TianjinNacelle plant

CORPORATE RESPONSIBILITY REPORT 2016 | APPENDICESAPPENDIX IV: LIST OF TABLES AND GRAPHS


APPENDIX IV: LIST OF TABLES AND GRAPHS

List of tables:

Table 1.- Global wind energy market .............................................................................................................................................................7Table 2.- Greenhouse Gas (GHG) emission savings due to installed MW ...................................................................................................9Table 3.- CSR Master Plan 2015-2017..........................................................................................................................................................10Table 4.- Wind turbines: Product range.......................................................................................................................................................23Table 5.- Gamesa’s presence in countries at 2016 year-end .....................................................................................................................25Table 6.- Evolution of share capital ..............................................................................................................................................................26Table 7.- Shareholding structure (at December 31)....................................................................................................................................26Table 8.- Number of employees by region ..................................................................................................................................................27Table 9.- Sales/revenue by countries/regions representing 5% or more of total revenue .....................................................................28Table 10.- Net costs included in the operating result by category ............................................................................................................28Table 11.- Total capitalization.......................................................................................................................................................................28Table 12.- Products and services provided..................................................................................................................................................28Table 13.- Wind turbines: Track record of MW installed by country ........................................................................................................29Table 14.- Wind turbines: Track record of MW installed by region and platform model ........................................................................30Table 15.- Operations and Maintenance: Track-record of MW in Operations & Maintenance..............................................................31Table 16.- Workforce by country and gender .............................................................................................................................................32Table 17.- Workforce by type of employment contract and gender .........................................................................................................32Table 18.- Workforce by type of employment and gender ........................................................................................................................32Table 19.- Global workforce (internal and external personnel).................................................................................................................33Table 20.- Employees covered by collective agreements...........................................................................................................................34Table 21.- Supply base: Number of suppliers..............................................................................................................................................35Table 22.- Procurement volume by supplier’s country of origin ...............................................................................................................36Table 23.- Direct procurement supply base (by business areas) ...............................................................................................................37Table 24.- Degree of procurement localization...........................................................................................................................................37Table 25.- Alternative supplier generation projects ...................................................................................................................................38Table 26.- Responsible measures on the supply chain ...............................................................................................................................40Table 27.- External initiatives which the company subscribes...................................................................................................................42Table 28.- Main Spanish associations of which Gamesa is a member (2016)...........................................................................................44Table 29.- Main international associations of which Gamesa is a member (2016)..................................................................................44Table 30.- Association membership and expenditure (€)...........................................................................................................................44Table 31.- Stakeholders: Most relevant means of engagement ................................................................................................................52Table 32.- Interaction with shareholders and the financial community ...................................................................................................53Table 33.- Interactions with employees.......................................................................................................................................................53Table 34.- Interaction with workers’ representatives ................................................................................................................................53Table 35.- Interactions with employees, media and general public ..........................................................................................................53Table 36.- Main topics of interest to stakeholders .....................................................................................................................................56Table 37.- General Meeting attendance data .............................................................................................................................................58Table 38.- Table on the Board of Directors’ composition (at December 31, 2016):.................................................................................59Table 39.- Table on the Executive Committee’s composition (at December 31, 2016):..........................................................................59Table 40.- Table on the Audit and Compliance Committee’s composition (at December 31, 2016):.....................................................60Table 41.- Table on the Appointments Committee’s composition (at December 31, 2016): ..................................................................61Table 42.- Table on the Remuneration Committee’s composition (at December 31, 2016):..................................................................61Table 43.- Table on the organization’s operating structure .......................................................................................................................62Table 44.- Appearances of senior executives before the Audit and Compliance Committee 2016........................................................69Table 45.- Ratio of the annual total compensation for the organization’s highest-paid individual to median annual totalcompensation ................................................................................................................................................................................................74Table 46.- Ratio of percentage increase in annual total compensation for the organization’s highest-paid individual to the medianpercentage increase in annual total compensation (in percentage points) .............................................................................................74Table 47.- List of corporate policies (available on the corporate website) ...............................................................................................76Table 48.- Progress report on compliance with the Global Compact’s principles....................................................................................77Table 49.- Number of accusations received by the Ethics and Compliance Department ........................................................................79Table 50.- Key stock market indicators ........................................................................................................................................................87Table 51.- Research and development (R&D) expenditure........................................................................................................................88Table 52.- R&D Ranking according to EU Industrial R&D Investment Scorecard......................................................................................88Table 53.- Direct economic value generated and distributed....................................................................................................................89Table 54.- Significant financial assistance received ....................................................................................................................................90Table 55.- Status of the management systems’ certifications ...................................................................................................................94Table 56.- Materials used by weight or volume..........................................................................................................................................95



Table 57.- Consumption of the most significant raw materials .................................................................................................................95Table 58.- Raw material consumption by semi-finished product line .......................................................................................................95Table 59.- Ecoefficiency in raw material consumption...............................................................................................................................96Table 60.- Non-renewable fuel consumption..............................................................................................................................................96Table 61.- Total energy consumption within the organization ..................................................................................................................97Table 62.- Renewable energy generation (GJ) ............................................................................................................................................98Table 63.- Ecoefficiency in energy consumption.........................................................................................................................................98Table 64.- Total water consumption ............................................................................................................................................................99Table 65.- Eco-efficiency in water consumption .........................................................................................................................................99Table 66.- Biodiversity Studies....................................................................................................................................................................104Table 67.- Species in areas affected by operations...................................................................................................................................105Table 68.- Total greenhouse gas emissions (Scope 1 + Scope 2) .............................................................................................................107Table 69.- Direct greenhouse gas (GHG) emissions (Scope 1, by origin).................................................................................................108Table 70.- Direct greenhouse gas (GHG) emissions (Scope 1, by geographic area) ...............................................................................108Table 71.- Indirect greenhouse gas (GHG) emissions (Scope 2, by geographic area) ............................................................................108Table 72.- Other indirect greenhouse gas emissions................................................................................................................................109Table 73.- Greenhouse gas (GHG) emissions intensity .............................................................................................................................109Table 74.- Reduction of greenhouse gases. Managed actions.................................................................................................................109Table 75.- Other significant air emissions..................................................................................................................................................110Table 76.- Volume discharged ....................................................................................................................................................................110Table 77.- Ecoefficiency of discharge.........................................................................................................................................................110Table 78.- Quality of the water of discharged...........................................................................................................................................111Table 79.- Waste generation by type.........................................................................................................................................................111Table 80.- Ecoefficiency in waste management ........................................................................................................................................111Table 81.- Destination of waste by treatment method ............................................................................................................................112Table 82.- Most common waste .................................................................................................................................................................112Table 83.- Eco-profile of Gamesa wind turbines .......................................................................................................................................114Table 84.- Environmental impact selection ...............................................................................................................................................114Table 85.- Environmental expenditures by type of expense....................................................................................................................116Table 86.- New hires within the social boundary......................................................................................................................................118Table 87.- Voluntary resignations ..............................................................................................................................................................119Table 88.- Parental leave and return to work............................................................................................................................................119Table 89.- Committees and dialog panels in Spain ...................................................................................................................................120Table 90.- Management of the occupational health and safety program ..............................................................................................122Table 91.- Frequency rate of accidents involving sick leave (FR) .............................................................................................................124Table 92.- Accident severity rate(SR) .........................................................................................................................................................124Table 93.- Sick leave incidence rate (IR) ....................................................................................................................................................125Table 94.- Accident Hazard Rate (HR) ........................................................................................................................................................125Table 95.- Accident lost day rate (LDR)......................................................................................................................................................125Table 96.- Occupational disease rate (ODR) ..............................................................................................................................................125Table 97.- External personnel accident rate: construction, projects and maintenance ........................................................................126Table 98.- Absenteeism rate.......................................................................................................................................................................126Table 99.- Hours of training ........................................................................................................................................................................128Table 100.- International mobility (international assignments) ..............................................................................................................130Table 101.- Personnel subject to performance assessment: by geographic areas.................................................................................130Table 102.- Workforce diversity indicators ...............................................................................................................................................133Table 103.- Employees by diversity category ............................................................................................................................................134Table 104.- Ratio of salaries between men and women within the corporate boundary .....................................................................135Table 105.- Trade union representation in Spain......................................................................................................................................139Table 106.- Subcontracted security personnel..........................................................................................................................................141



List of illustrations:

Fig 1.- Evolution of the global wind energy market ......................................................................................................................................8Fig 2.- Gamesa's ERM Model ........................................................................................................................................................................14Fig 3.- Evolution of the cumulative wind power installed by Gamesa.......................................................................................................22Fig 4.- Wind turbines - Track record of MW installed by Gamesa .............................................................................................................30Fig 5.- Cumulative MW installed (by region) ...............................................................................................................................................30Fig 6.- Cumulative MW installed (by platform) ...........................................................................................................................................30Fig 7.- Average age of workforce 2016 ........................................................................................................................................................33Fig 8.- Workforce by type of employment contract 2016 ..........................................................................................................................33Fig 9.- Evolution of global workforce ...........................................................................................................................................................33Fig 10.- Evolution of global workforce by areas ..........................................................................................................................................33Fig.11.- Overall procurement volume (evolution).......................................................................................................................................36Fig 12.- Overall procurement volume 2016 (by geographic areas) ...........................................................................................................36Fig 13.- Distribution of supplies 2016 (by geographic areas and typology) ..............................................................................................36Fig 14.- Distribution of supplies 2016 (by nature of supply) ......................................................................................................................36Fig 15.- Procurement: CSR assessment on suppliers 2016.........................................................................................................................39Fig 16.- Procurement: Supplier management systems...............................................................................................................................39Fig 17.- Quality: Performance assessment of the most important suppliers 2016 ..................................................................................40Fig. 18.- List of aspects analyzed ..................................................................................................................................................................47Fig 19.- Gamesa materiality analysis 2016...................................................................................................................................................47Fig 20.- Stakeholders .....................................................................................................................................................................................51Fig 21.- Gamesa website in 2016..................................................................................................................................................................54Fig 22.- Gamesa intranet in 2016 .................................................................................................................................................................54Fig 23.- The United Nations Global Compact’s ten principles ....................................................................................................................76Fig 24.- Comparative listing - Gamesa vs. IBEX35 .......................................................................................................................................86Fig 25.- Evolution of Gamesa’s listing 2016 .................................................................................................................................................86Fig 26.- Energy consumption evolution - Total (GJ) ....................................................................................................................................97Fig 27.- Energy consumption evolution - Total by areas (GJ) .....................................................................................................................97Fig 28.- Energy Consumption (GJ) per MW installed ..................................................................................................................................97Fig 29.- Energy Consumption (GJ) per employee ........................................................................................................................................97Fig 30.- Evolution of CO2 emissions (tCO2 eq)............................................................................................................................................107Fig 31.- CO2 emissions in 2016 by regions (tCO2 eq) .................................................................................................................................107Fig 32.- Global warming potential (GWP-100y) during the life cycle of Gamesa wind turbines ...........................................................114Fig 33.- LCA GHG emissions of energy systems (GWP expressed in gCO2 eq/kWh) .................................................................................114Fig 34.- Participation in the working environment survey .......................................................................................................................118Fig 35.- Overall satisfaction level................................................................................................................................................................118Fig 36.- CSP 2016 Results ............................................................................................................................................................................154Fig 37.- CSP 2016 Conclusions ....................................................................................................................................................................154

Notice to readers: This a free translation of the original document published in Spanish language “ Informe deResponsabilidad Corporativa 2016” publicly released throughout Gamesa website. In case of discrepancy on any ofthe contents, the Spanish version shall always prevail.IRU

©2017Gamesa Corporación Tecnológica, S.A.Parque Tecnológico de Bizkaia. Edificio 222Zamudio, VizcayaSpain

www.gamesacorp.com

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